Consolidation—Key Exercises

IMPORTANT
It is extremely important that you set up and work within your own company to maintain your data integrity. If you work within any other company, your exercises will not function as intended and the data of other students might be affected. Predictable exercise results require that your data is isolated in your own company.

Basic Data Setup

Purpose: The purpose of this exercise is to set up the basic data required to perform the consolidation process, which is the topic of the Main Exercise below. For obvious reasons, you must go through the Basic Data Setup exercise before starting with the Main Exercise.

Link to BasicDataSetup

Main Exercises

Purpose: The purpose of this lesson is to show you how to consolidate a subsidiary company's data so that it can be transferred to and updated in the parent company. The lesson is divided into two separate blocks, Balance Consolidation and Budget Consolidation.

Balance Consolidation, Subsidiary

Subsidiary Balance Consolidation

Purpose: The purpose of this exercise is to show you how to consolidate a subsidiary company's data so that it can be transferred to the parent company. Consolidation of general ledger balances takes place periodically, and consolidation of budget balances typically occurs annually. If the subsidiary and parent companies are not in the same database, the consolidation can be created in a file and then sent to the parent company. All period vouchers must be in the general ledger, and the period must be closed before the consolidation can be created. Opening Balances (Period 0) must be consolidated before you can start to consolidate normal periods, and normal periods must be consolidated in sequence, i.e. 1, 2, 3 etc.

Windows:
Voucher Entry
 Accounting Periods
 Subsidiary Consolidations

Opening Balances, Period 0:

  1. Open the Accounting Periods window, and query for the year in which the consolidation will occur.

  2. Verify that the Opening Balance status is FinalFinal Year End GL function.

  3. Open the Subsidiary Consolidations window. Right-click and then click Start Subsidiary Balance Consolidation.

  4. The ID of the parent company is displayed on the screen.

  5. Enter the year and period to be consolidated, in this case relevant year and period 0.

  6. If the consolidation will include statistical accounts and quantities, then select the Include Statistical and Quantities check boxes.

  7. Click OK.

  8. When the consolidation is complete, a confirmation message is displayed on the screen. An error message is displayed if there were any errors in connection with validation of code strings. You can open the error log to view these errors.

  1. Open the Accounting Periods window, and query for the year in which the consolidation has been carried out.

  2. Note that the Opening Balance Consolidated checkbox has been checked.

Note: Repeat this exercise for each subsidiary company to be consolidated.

Normal Periods, Period 1-X:

  1. Open the Voucher Entry window, and query for the year and period to be consolidated.

  2. If any period vouchers exist, update them to the general ledger by right-clicking and then clicking Instant Update General Ledger.

  3. Open the Accounting Periods window, and query for the year in which the consolidation will occur.

  4. Change the period status to closed so that the period can be consolidated.

  5. Save your changes.

  6. Open the Subsidiary Consolidations window. Right-click and then click Start Subsidiary Balance Consolidation.

  7. The ID of the parent company is displayed on the screen.

  8. Enter the year and period to be consolidated. Note that normal periods must be consolidated in sequence, i.e. 1, 2, 3 etc.

  9. If the consolidation will include statistical accounts and quantities, then select the Include Statistical and Quantities check boxes.

  10. Click OK.

  11. When the consolidation is complete, a confirmation message is displayed on the screen. An error message is displayed if there were any errors in connection with validation of code strings. You can open the error log to view these errors.

  1. Open the Accounting Periods window, and query for the year in which the consolidation has been carried out.

  2. Note that the Balance Consolidated column has been set to Yes for involved period.

Note: Repeat this exercise for each subsidiary company to be consolidated.

Balance Consolidation, Parent

Update Opening Balances

Purpose: The purpose of this exercise is to show you how to update the parent company's accumulated balances with the subsidiary's opening balances, achieving a starting point for the year. When each normal period is consolidated, new information is added to the accumulated balances. These accumulated balances are necessary input to the Currency Balance Adjustment calculation further down in the parent balance consolidation. As this won't affect the parent's General Ledger, no voucher will be created!

Note: Be sure to switch to the parent company before proceeding with this exercise. Opening balances must be updated before you can proceed with consolidation of normal periods.

Windows:
Parent Consolidations

  1. Populate the window and select the line to be updated to the parent. Line period must be 0.

  2. Right-click and then click Update Opening Balances.

  3. The proposed values are displayed in the fields.

  4. Click OK. A confirmation message is displayed on the screen when the update is complete.

  5. In the Parent Consolidations window, the Balance Consolidated check box is now checked for the selected line.

Note: Repeat this exercise for each subsidiary company to be consolidated.

Rollback Opening Balances

Purpose: The purpose of this exercise is to show you how to roll back, or reverse, an update of opening balances. This can be done as long as the next period, i.e. period 1, hasn't been consolidated. Relevant accumulated balances will be removed. As this won't affect the parent's General Ledger, no reversing voucher will be created! If the parent company has not yet been updated, the subsidiary can delete the consolidation line directly.

Windows:
Parent Consolidations
 Subsidiary Consolidations
 Accounting Periods

  1. Populate the Parent Consolidations window.

  2. Highlight the line to be reversed, right-click, and then click Rollback Balance Consolidation. The default values are shown in the fields.

  3. Click OK.

  4. A confirmation message is displayed on the screen when the reversal is complete.

  5. In the Parent Consolidations window, the Balance Consolidated check box is now unchecked for the selected line.

  6. Switch to the subsidiary company.

  7. Populate the Subsidiary Consolidations window.

  8. Select the subsidiary's balance consolidation line, and delete it. 

  9. Open the Accounting Periods window and query for the involved year.

  10. Note that the Opening Balance Consolidated checkbox  has been unchecked, enabling you to re-run Subsidiary Balance Consolidation for period 0.

Balance Consolidation

Purpose: The purpose of this exercise is to show you how to consolidate transferred subsidiary balances into the parent company.

Windows:
Parent Consolidations
 Voucher Entry

Note: Be sure to switch to the parent company before proceeding with this exercise. Opening balances must be updated before you can proceed with consolidation of normal periods, and the periods must be consolidated in sequence, i.e. 1, 2, 3 etc. The Currency Balance Adjustment function must also be executed for the first period before you can consolidate the second period, and so on.

  1. Populate the Parent Consolidations window, and select the line to be consolidated to the parent.

  2. Right-click and then click Start Balance Consolidation.

  3. The proposed values are displayed in the fields. If the parent and subsidiary companies have different accounting (base) currencies, enter desired Currency Rate Type, separately for Balance Accounts and Profit & Loss Accounts. The valid rate from each Currency Rate Type will be displayed automatically.

  4. Click OK. A confirmation message is displayed on the screen when the consolidation is complete. A consolidation voucher has now been created automatically in the parent company's hold table in IFS Accounting Rules. Accumulated balances for the period has also been updated.

  5. In the Parent Consolidations window, the Balance Consolidated check box is now checked for the selected line.

  6. Open the Voucher Entry window and query for Voucher Type C.

  7. View the voucher data. The subsidiary company should be displayed in the code part field that was used for the consolidation function.

Note: Repeat this exercise for each subsidiary company to be consolidated.

Rollback Balance Consolidation

Purpose: The purpose of this exercise is to show you how to roll back, or reverse, a consolidation. A rollback of a balance consolidation can be performed as long as Currency Balance Adjustment hasn't been performed for the involved period. If so, you must rollback that action first. If the parent company has consolidated a transfer, the reversal must be made from the parent company. A reversing voucher is created automatically in the parent company's hold table, and the line can then be deleted in the subsidiary's Subsidiary Consolidations window. If the parent company has not been consolidated, the subsidiary can delete the consolidation line directly.

Windows:
Parent Consolidations
 Subsidiary Consolidations
 Accounting Periods

  1. Populate the Parent Consolidations window.

  2. Highlight the line to be reversed, right-click, and then click Rollback Balance Consolidation. The default values are shown in the fields.

  3. Click OK.

  4. A confirmation message is displayed on the screen when the reversal is complete. A reversing consolidation voucher has now been created automatically in the parent company's hold table in IFS Accounting Rules. Accumulated balances for the period has also been removed.

  5. In the Parent Consolidations window, the Balance Consolidated check box is now unchecked for the selected line.

  6. Switch to the subsidiary company.

  7. Populate the Subsidiary Consolidations window.

  8. Select the subsidiary's balance consolidation line, and delete it.

  1. Open the Accounting Periods window and query for the involved year.

  2. Note that the Balance Consolidated column has been set back to No for involved period, enabling you to re-run Subsidiary Balance Consolidation for that period.

Currency Balance Adjustment

Purpose: The purpose of this exercise is to show you how to create a Currency Balance Adjustment. This step is necessary in order to achieve correct period closing balances for balance sheet accounts, when subsidiary and parent operate with different accounting (base) currencies. The currency rate difference between current and previous period is multiplied with accumulated balances up to and including previous period. If subsidiary and parent operate with different accounting (base) currencies, a currency balance adjustment voucher is created automatically in the parent company's hold table. Also, a new line for the same period, but with Consolidation Type Currency Adjustment, is always created in the Parent Consolidations window. Please note that this operation must be done before the next period can been consolidated, regardless of if subsidiary and parent operate in different or the same accounting (base) currency. The operation is always made from the parent company.

Windows:
Parent Consolidations
Voucher Entry

Note: Be sure to switch to the parent company before proceeding with this exercise. 

  1. Populate the Parent Consolidations window, and select the line to be currency balance adjusted.

  2. Right-click and then click Start Currency Balance Adjustment.

  3. The proposed values are displayed in the fields. Normally, all necessary information should be displayed. When you however run this function for period 1, there exists no rates for previous period in the system. This means that you have to enter it manually. The rate should be the same as the rate used for consolidating balance sheet accounts for the last period previous year. The currency rate difference will be automatically calculated and displayed.

  4. Click OK. A confirmation message is displayed on the screen when the operation is complete. If subsidiary and parent operate with different accounting (base) currencies, a currency balance adjustment voucher has now been created automatically in the parent company's hold table in IFS Accounting Rules.

  5. In the Parent Consolidations window, a new line for the same period, but with Consolidation Type Currency Adjustment, has now been created.

  6. If subsidiary and parent operate with different accounting (base) currencies, open the Voucher Entry window and query for Voucher Type C.

  7. View the voucher data. The subsidiary company should be displayed in the code part field that was used for the consolidation function.

Note: Repeat this exercise for each subsidiary company to be consolidated.

Rollback Currency Balance Adjustment

Purpose: The purpose of this exercise is to show you how to roll back, or reverse, a Currency Balance Adjustment. This operation can be done as long as the next period hasn't been consolidated. The rollback must always be made from the parent company. If subsidiary and parent operate with different accounting (base) currencies, a reversing voucher is created automatically in the parent company's hold table. Also, the new line that was created in the Parent Consolidations window is removed.

Windows:
Parent Consolidations

  1. Populate the window.

  2. Highlight the line to be reversed, right-click, and then click Rollback Currency Balance Adjustment. The default values are shown in the fields.

  3. Click OK. A confirmation message is displayed on the screen when the reversal is complete. If subsidiary and parent operate with different accounting (base) currencies, a reversing currency balance adjustment voucher has now been created automatically in the parent company's hold table in IFS Accounting Rules.

  4. In the Parent Consolidations window, the selected line with Consolidation Type Currency Adjustment, has now been removed.

Budget Consolidation, Subsidiary

Subsidiary Budget Consolidation

Purpose: The purpose of this exercise is to show you how to consolidate a subsidiary's budget data to the parent company. Consolidation of budget balances usually takes place annually, although it can occur more often.

Note:  A budget must exist in the subsidiary company. Also, be sure to switch to the subsidiary company before continuing with this exercise.

Windows:
Subsidiary Consolidations

  1. Right-click and then click Start Subsidiary Budget Consolidation.

  2. The ID of the parent company is displayed on the screen.

  3. Enter the budget year and budget version to be consolidated.

  4. If the consolidation will include statistical accounts and quantities, then select the Include Statistical and Quantities check boxes.

  5. Click OK.

  6. When the consolidation is complete, a confirmation message is displayed on the screen.

Note: Repeat this exercise for each subsidiary company to be consolidated.

Budget Consolidation, Parent

Budget Consolidation

Purpose: The purpose of this exercise is to show you how to consolidate transferred subsidiary budgets into the parent company's budget version.

Windows:
Budget Versions Parent Consolidations
Budget Period Amount

Note: Be sure to switch to the parent company before proceeding with this exercise. 

  1. Open the Budget Versions window, and create a new record.
  2. Enter the current year as the budget year.
  3. Enter a budget version and description.
  4. Save your changes.
  5. Verify that the budget has Active status.
  6. Open the Parent Consolidations window. Populate the window, and select the budget line to be consolidated.
  7. Right-click and then click Start Budget Consolidation. Proposed values from the selected line are displayed in the fields.
  8. Enter the parent budget version. This is where the transferred budget will be placed.
  9. If the parent and subsidiary companies have different accounting (base) currencies, enter desired Currency Rate Type, separately for Balance Accounts and Profit & Loss Accounts. The valid rate from each Currency Rate Type will be displayed automatically.
  10. Click OK.
  11. In the Parent Consolidations window, the Budget Consolidated check box is checked on the line with the budget information.
  12. Open the Budget Period Amount window, and query for your budget version.
  13. View the subsidiary budget values that were consolidated into the parent's budget. Note that the subsidiary's Company Id is automatically placed in the parent consolidation code part, just as in the balance consolidation.

Note: Repeat this exercise for each subsidiary company to be consolidated.

Rollback Budget Consolidation

Purpose: The purpose of this exercise is to roll back, or reverse, a budget consolidation. If the parent company has consolidated a transferred budget, then the reversal must be made from the parent company. If the parent company has not consolidated the budget,  the subsidiary can delete the consolidation line directly.

Windows:
Parent Consolidations
Subsidiary Consolidations

  1. Populate the Parent Consolidations window.

  2. Highlight the line to be reversed, right-click, and then click Rollback Budget Consolidation. The default values are displayed in the fields.

  3. Use the List of Values to select the parent company, budget year, and budget version. 

  4. Click OK.

  5. A confirmation message is displayed on the screen when the reversal is complete.

  6. Switch to the subsidiary company.

  7. Populate the Subsidiary Consolidations window.

  8. Select the subsidiary's budget consolidation line, and delete it.