Prepare Consolidation - Parent Company

IFS/Consolidated Accounts is used for consolidation of general ledger balances and budget balances from a group of one or more companies to a parent company. All the companies involved must be registered in IFS/General Ledger. If the companies form a group having several levels, the links between these companies must be entered in IFS/Accounting Rules.

The work with the consolidation starts in the subsidiary. Consolidation of general ledger balances takes place periodically, while consolidation of budget balances usually takes place annually. If subsidiary and parent company are not in the same database, the consolidation can be created in a file and then sent to the parent company.

The subsidiary and the parent company can use different accounting currencies. However, for consolidation, the currency rates are determined by the parent company. Any currency rate differences are calculated and posted automatically. IFS/Accounting Rules contains functions for managing currency rates and posting types.

Basic Data Requirements (BDR)

Before the consolidation can start in the parent company, the code part function Consolidation must be specified. The identities for the subsidiaries are entered and the code part demands must be checked. Also, the voucher type must be stored as original. If the subsidiary company and the parent company keep accounts in different currencies, a posting type for currency differences must be specified.

The following must be done in the parent company before consolidation can occur:

Select Define Code String. Enter the code part function Consolidation for one code part.
Select Code Part Values. Select the tab for the code part used for the additional function Consolidation. Enter the identities for the subsidiaries being consolidated.
Be sure that the code part requirement is Can or Mandatory for the code part used for consolidation. The code part demands are defined per account type in Account Types. The code part demands can also be defined per account in Account.
Select Voucher Type. The Store Original field must be checked for voucher type C.
If the subsidiaries and their parent company use different accounting currencies, the posting type GP6 Difference account consolidation must be entered. Select Posting Control, then enter the posting type and the control type AC1, Fixed value.

Description of Process Model

When the balance consolidation information exists in the subsidiary, it can be retrieved in the parent company from either the same data base or from a file. When the consolidation transfer is performed in the parent company, a voucher is created automatically and placed in the parent company's hold table. The voucher is then updated to the general ledger. If consolidation of general ledger balances must be changed, consolidation can be reversed and a voucher created with the opposite postings for transfer to the hold table and subsequent updating to the general ledger.

When the budget consolidation information exists in the subsidiary, it is consolidated in the parent company from either the same data base or from a file. Consolidation of budget values can also be changed by means of a reversal. If the parent company has consolidated the budget values, reversal must take place from the parent company.

Follow-up of consolidation takes place within the parent company. The parent company can use any of the functions within IFS Financials: queries, fixed reports, or IFS/Report Generator.