The Consolidation feature allows you to consolidate an unlimited number of companies, each of which was originally created as a separate client. One company is designated as the parent for the entire group, and the system creates a separate, new client to represent the consolidated results.
After you identify the parent and subsidiary clients and enter transactions for them, you can specify the companies to be consolidated. Run the consolidation to transfer the adjusted balances from the parent and all subsidiaries to the consolidated company and total the values in all common accounts. Eliminating journal entries can then be entered at the consolidated level.
Note: We recommend using a common account format, number of periods, and parallel charts of accounts, but you can consolidate the data successfully even if these differ.
If there are discrepancies among the subsidiaries, the parent company governs the account descriptions, year ending date, and financial statement formatting. If a parent or subsidiary uses departments, these are combined into company totals. Departments are not consolidated.
You can create a consolidated company from any existing companies listed on the Client Management screen.
To consolidate companies:
1. Select Consolidated from the Firm Administration menu to open the Set Up Consolidated Company screen.
2. Enter a new client code for the consolidated company in the New Client Code field.
Note: By default, the name of the consolidated company is the parent name with & Subsidiaries added.
3. Select the Include Beginning Balances option to consolidate the beginning balances of the parent and subsidiaries.
This option totals all unconsolidated beginning balances, but the results must be reviewed to eliminate intercompany activity.
If you have consolidated the opening balances, any investment in subsidiaries must be adjusted when the entities are consolidated. With the consolidated client active, select Account from the Company menu and select the Beginning Balances tab to make these changes.
4. Select the parent company from the list in the Available Companies field and click Add.
Important! You must add the parent company first.
If you add another company to the Selected Companies list before adding the parent, select the non-parent company and click Remove, then select the parent company and add it to the Selected Companies list first.
The company is added to the Selected Companies field and the name appears in the Parent field.
5. Select each additional company to be consolidated in the Available Companies list and click Add.
You can select each company separately to add it to the Selected Companies list, or you can add multiple companies at the same time:
§ To add a block of companies that are listed sequentially in the Available Companies list, select the first company in the list, hold down the Shift key, and select the last company to select all of the companies in between, as well.
§ To add multiple non-sequentially listed companies at once, select the first company, hold down the Ctrl key and click the additional companies to select them.
To remove a company, select the company name in the Selected Companies list and click Remove.
6. Click Create to create the consolidated entity.
The consolidated client is created and the Select Client screen appears, with the new consolidated client selected.
7. Select Consolidate from the Trial Balance menu to open the Consolidate screen.
This menu item is only available for consolidated clients.
8. Enter the period ending date in the Period field and select the companies to consolidate in the Select Client field, then click Consolidate.
Typically, you select All companies, but you can select a single company, if necessary.
9. Select Adjustment from the Trial Balance drop-down menu after each period is consolidated to write eliminating journal entries for intercompany activity.
This is the only kind of adjustment available at the consolidated level.
10. Review the Consolidated Trial Balance, displaying the final result, eliminating journal adjustments, total before adjustments, and amounts by originating company.
In addition, you can view consolidation reports such as the Trial Balance, Exception, and Chart of Account reports.
11. Prepare and generate financial statements normally.
The adjusted consolidated balances are printed.