Consolidating business units Fart cam chat


23-May-2017 11:13

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These Due From and Due To rows in the ledger are candidates for elimination when you run the Consolidations process.The following example shows such a transaction when company B0002 buys software for company B0001: When the transactions are exclusively within the organization, you can eliminate the whole transaction when you set up your Consolidations process.New entries to the Ledger table are used to generate consolidated reports.The Undo feature enables you to reprocess consolidation as many times as necessary.Organizations often have complex structures with multiple business or operating units and legal entities with varying degrees of ownership.If your organization comprises more than one business unit or operating entity, you can consolidate these organizations when you report on overall operations, presenting financial statements that accurately describe your financial status.In the following example, Company B0001 sold services to Company B0002.The Revenue and Expense accounts need to be eliminated in addition to the Due From and Due To accounts: The Affiliate Chart Field is specifically reserved to map transactions between business units when using a single intercompany account.

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Rules determine which ledger entries are identified and eliminated by defining elimination and minority interest sets.In the case of the following intercompany receivable and payable relationship, you require only one elimination set if you use the Affiliate Chart Field: In consolidating the books of a subsidiary with those of the parent company, you credit the parent with the portion of the subsidiary that it actually owns and exclude what outside investors own.The value of minority interests is reported in terms of the aggregate net assets (equity) rather than in terms of a fractional equity in each of the assets and liabilities of the subsidiary.Consolidated capital stock and retained earnings is equal to the balances of the parent.

Ledger data is entered and posted through daily journal processing.Effectively, the combined result of the adjustments and eliminations entries is to express the value of the parent investment in terms of the assets and liabilities of the subsidiary offset by a minority interest liability.The equity ownership for each subsidiary in the consolidation is eliminated, with only the parent company's equity accounts and minority interest account remaining.While there may be situations that require you to report gross consolidations (combining business unit ledger balances without eliminations), in most cases, you want to eliminate or cancel out the effect of intercompany transactions.