Consolidation Group

Consolidation Group describes one group for its group accounts: the company that keeps the consolidated books, the member companies, how much of each is owned and how each is brought in, the exchange rates used, and the accounts the run posts to. Saving it posts nothing. Consolidation Run reads it and posts.

Where

General Ledger › Consolidation › Consolidation Group

Who uses it

The group accountant

When

Once per group, and when a company joins, leaves or changes ownership

Needs first

A legal entity for the consolidated books, the members as legal entities, rates in two Exchange Categories, a Transaction Journal, and the group accounts released to the consolidation legal entity

What it is for

The group is opened in the legal entity that keeps the group accounts, usually a company of its own that has no trading. Each member's ledger stays as it is; the run copies the member balances into the consolidation legal entity, translated to the group currency, and posts the eliminations there.

Every field in plain words

Header

Field	What it means
Consolidation Group	The group's code. It must be new
Group Name	Required
Currency	The group currency. Empty means the local currency of the consolidation legal entity
Closing Rate Category	The Exchange Category whose rate on the Till Date translates balance sheet accounts. Required
Average Rate Category	The Exchange Category whose rate on the Till Date translates income and expense accounts. Required
Transaction Journal	The journal of the General Entries the run posts. Required
Notes	Free text
Translation Difference Account	Where what is left after translating a member's balances goes (the translation reserve). Required
Non-Controlling Interest Account	The outside owners' share of a member owned less than 100%
NCI Share of Profit Account	The outside owners' share of the member's profit
Goodwill Account	What is paid for a member above its equity at acquisition
Share of Associate Profit Account	Our share of an associate's result, for members on the equity method
Equity at Acquisition From, To	The range of equity accounts (share capital, reserves at acquisition) eliminated against the investment

Members

Column	What it means
Member Legal Entity	A company of the group. Never the consolidation legal entity itself, and each only once
Method	Full, Proportionate, Equity Method or Not Consolidated
Ownership %	More than 0 and at most 100
Historical Rate	The rate equity accounts are translated at. Needed when the member's currency differs from the group's
Investment Account	The account in the group books holding the cost of this member. Fill it to eliminate the investment; required for the equity method

Account Rules

Optional. Each line maps a range of the members' accounts (From Account, To Account) to one Group Account and, if filled, a Rate Type. The first line whose range holds an account wins. An account no line covers keeps its own number and takes the rate type of its nature: equity at the historical rate, income and expense at the average rate, everything else at the closing rate.

Eliminations

Each line names an Elimination Group, an Account and a Difference Account. All accounts of one elimination group are reversed in the group books together, for every member; what does not net to nil goes to the group's one Difference Account. Typical groups: intercompany receivable against payable, intercompany sales against purchases.

The methods

Method	What the run does with the member
Full	Takes every balance at 100%. If owned less than 100%, the outside owners' share goes to Non-Controlling Interest
Proportionate	Takes every balance at the Ownership %
Equity Method	Takes no balances. Posts our share of the member's result since it joined: on the Investment Account, against Share of Associate Profit
Not Consolidated	Left out

What Save checks

• Name, both rate categories, the Translation Difference Account and the Transaction Journal are filled.
• At least one member, each with a legal entity and a method, each only once, and not the consolidation legal entity itself.
• Ownership % is more than 0 and at most 100.
• A member on the equity method has an Investment Account, and the header has Share of Associate Profit Account.
• A Full member owned less than 100% needs the Non-Controlling Interest and NCI Share of Profit accounts.
• A member with an Investment Account, other than on the equity method, needs the Equity at Acquisition range and the Goodwill Account.
• Each elimination line has an Elimination Group and an Account, and each elimination group has exactly one Difference Account.

How to configure it

1. Make the consolidation legal entity, and release to it every group account the run will post to: the members' accounts (or the Group Accounts of the Account Rules), the translation, goodwill and NCI accounts, and the difference accounts.
2. Enter the rates of each member currency to the group currency in the closing and average Exchange Categories.
3. Open Consolidation Group in the consolidation legal entity and fill it in.

Scenarios

• A wholly owned subsidiary in the same currency. Method Full, Ownership 100, Investment Account. Its balances come in at rate 1, the investment is eliminated against its equity, goodwill takes the difference.
• A 60% subsidiary abroad. Method Full, Ownership 60, its Historical Rate. 40% of its equity, reserves and profit goes to Non-Controlling Interest.
• A 30% associate. Method Equity Method, Ownership 30, Investment Account. Only our 30% of its result is posted.

What it is connected to

• Consolidation Run - posts the consolidation from this group.
• Exchange Category and Currency Conversion - the closing and average rates.
• Release Account in Legal Entity - the group accounts.
• How do I consolidate the group's companies?.

If something looks wrong

• "Closing and Average Exchange Category are required" / "Translation Reserve Account and Journal are required" Fill the header.
• "Add at least one Member"
• "Member - Line ID: ... - the consolidation legal entity cannot be its own member" Remove that line.
• "Member - Line ID: ... - the equity method needs an Investment Account and the group's Equity Income Account" Fill the member's Investment Account and the header's Share of Associate Profit Account.
• "Member - Line ID: ... - a member owned less than 100% needs the NCI and NCI Profit accounts"
• "Member - Line ID: ... - eliminating the investment needs the Equity account range and the Goodwill account"
• "A Legal Entity can be a member only once"
• "Elimination Group ... needs one Difference Account" Give every line of that group the same Difference Account.