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Set up Consolidations

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Overview 

Consolidations allow you to combine the assets, liabilities and financial data from two or more legal entities into one. When financial statements are consolidated into one, each subsidiary can report under the umbrella of a parent company. In Accounting Seed, you have the ability to include multiple Ledgers, with each one representing different companies. For example, Company A, B, and C might be owned by the same person, with each company doing different things or selling different items. Using this example, Consolidations would provide the ability to add the transaction results of all three companies into one set of financial reports.

If you have two or more companies with transactions, Consolidations in Accounting Seed will allow you to aggregate all of the transactions into the Financial Cubes at the GL Account level. You will have the ability to run Standard Reports and/or Custom Reports for all the Consolidations Ledgers or for the Transactional Ledgers (lower/company Ledgers). For your convenience, Accounting Seed has included the Set up Consolidations tab and the Run Consolidations tab directly along with the Financial Reporter tabs. That way, once you complete the setup and run Consolidations, by simply clicking a tab, you will be able to access the Standard Reports and/or Custom Reports for running Consolidations Reports. 

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Prior to setting up Consolidations, you need to have the Consolidations-Transactional and/or Consolidations-Budget Ledgers already created in the Ledger screen. For more information, refer to the Ledger section of the Design Your Chart of Accounts article. 

Once the Consolidations-Transactional and/or Consolidations-Budget Ledger(s) has been created, you can access the Set up Consolidations tab to create a hierarchy tree for Consolidations. The Ledger Hierarchy screen displays from the Set up Consolidations tab. Use the Create Hierarchy button on this screen to add a Consolidations Ledger, which will represent the topmost part of the tree. Only Consolidations Ledgers can be created at this level. Transactional Ledgers cannot be selected at the topmost level of the hierarchy tree. When a Consolidations Ledger is selected and added to the tree, its corresponding  Eliminations Ledger will automatically be added. For example, a Consolidations Ledger with the Ledger Name of “West Coast” was added; its corresponding Eliminations Ledger of “West Coast - EL” will automatically be added. 

An Eliminations Ledger is used to manually post transactions that should not be included as part of a Consolidations Ledger. For example, there might be a tax adjustment that should not be included as part of a Consolidations Ledger. Using this example, a Journal Entry could be posted to the Eliminations Ledger to prevent the tax adjustment amount from being included as part of the Consolidations financial reports. Another example for using an Eliminations Ledger to manually post transactions would be to remove intercompany transactions. For example, Company A might sell items to Company B, and both companies are part of the hierarchy for Company A-G. Using this example, to prevent double counting of the items that are sold between Company A and B, a Journal Entry could be posted to the Eliminations Ledger to prevent these transactions from showing up twice as part of the Consolidations financial reports. Basically, for transactions going between the various companies, you would want to use the Eliminations Ledger to remove these transactions, and only retain transactions going out to customers, which is what you want to show on your Consolidations financial reports. 

Note: Eliminations Ledgers cannot be manually added or deleted. If a Consolidations Ledger is deleted from a hierarchy tree, the related Eliminations Ledger will automatically be deleted.

Consolidations Icons

When you initially access the Set up Consolidations tab, the following icons are available on the upper-right portion of the screen.  

Access Path: Navigate to Accounting Home and click the Run Reports tab. Then, under the Consolidations menu, click Set Up Consolidations.

  • FR_Standard_02.png Management Reports - provides access to the same reports that are available from the Accounting Home | Reporting | Management Reports link. This is a quick and easy way to access the Management Reports without having to return to the Accounting Home page. 
  • FR_Standard_03.png Knowledge Base - provides access to this Set up Consolidations knowledge article. If you have the Run Consolidations tab selected, the Run Consolidations knowledge article displays when this icon is clicked.
  • FR_Standard_04.png Dashboard - provides access to the same Accounting Dashboard that is accessible from Accounting Home |  Reporting | Dashboards.

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Ledger Hierarchy Considerations

When creating a Ledger Hierarchy tree, keep the following points in mind:

  • Only a Consolidations-Transactional Ledger and/or a Consolidations-Budget Ledger can be selected for the topmost level.
  • In order to select a Consolidations Ledger, it cannot be one that already exists on a different hierarchy tree. 
  • When Multi-currency is enabled, the Ledger Hierarchy tree can include Ledgers with currencies that are different from the parent currency (Ledger at the topmost level of the tree). For example, the currency for the parent Ledger (topmost level) might be USD, and children Ledgers within this tree might include EUR and CAD. 

    SetupCL_02.png
    Note: Click here to view the above image in full screen. 

  • The ability to add a Ledger is only available for Consolidations Ledgers. Clicking Add Ledger will display the Add Ledger dialog box to add a new Ledger.

    CL_01.png

  • The same Ledger cannot be added more than once to the same Ledger Hierarchy.
  • When adding a Ledger using this dialog box, the Current Year Earnings, Retained Earnings and CTA (only displays if Multi-currency is enabled) GL Accounts are required fields. Additionally, if you select to add a Ledger that includes GL Accounts already added in the Default GL Accounts screen, the required GL Account fields will auto-populate in this dialog box.
  • A new Ledger cannot be added if the Run Consolidations routine is in progress for the selected Ledger Hierarchy. 
  • A new Ledger cannot be added if Consolidations Financial Cubes exist for the closed and/or archived period for the selected Ledger Hierarchy. 
  • All Ledgers within a Ledger Hierarchy must be the same type. For example, if the top level is a Consolidations-Transactional Ledger, then only Consolidations-Transactional and Transactional Ledgers can be added. Using this example, a Consolidations-Budget Ledger and/or a Budget Ledger could not be added. 
  • Eliminations Ledgers cannot be manually added to a Ledger Hierarchy. 
  • A Transactional Ledger and Budget Ledger can be added to more than one Ledger Hierarchy. 
  • Clicking Edit from any Ledger assigned to a Ledger Hierarchy will display the Edit Ledger Hierarchy dialog box. You can edit the name, GL Accounts, sort order, and notes.

    CL_02.png

  • After creating a hierarchy tree, the order in which the child Ledgers display can be modified by editing the Ledgers within the Ledger Hierarchy and changing their sort order number. 
  • Only Ledgers at the same hierarchy level can be sorted between themselves. 
  • The sort order number can be between the number 1 and the number of Ledgers on the same hierarchy level. For example, you might have an Eliminations Ledger, a Transactional Ledger, and a Consolidations Ledger on the same hierarchy level. Using this example, the sort order numbers would be between 1 and 3. 
  • The ability to remove a Ledger is available for all Ledgers except Eliminations Ledgers. An Eliminations Ledger cannot be manually removed. It will automatically be removed when the related Consolidations Ledger is removed.

    Clicking Remove Ledger will display a pop-up box with a message similar to the below message.

    CL_06a.png

  • Consolidations Ledgers cannot be removed if Ledgers exist at a lower level underneath. 
  • A Ledger Hierarchy that has associated transactions cannot be removed.
  • A Ledger cannot be removed if the Run Consolidations routine is in progress for the selected Ledger Hierarchy. 
  • In order to modify a Ledger Hierarchy after a Run Consolidations routine has been performed, the Accounting Period it was run on will need to be reopened. After the Accounting Period is reopened, the hierarchy can be modified, and then the Accounting Period will need to be re-closed before you rerun the Run Consolidations routine. 

After the topmost level of the tree is added, you can continue to group Consolidations-Transactional and Transactional Ledgers (or Budget Ledgers, if the topmost level is a Consolidations-Budget Ledger) in the tree for reporting purposes. In the sample below, a Ledger Hierarchy tree has been added. Consolidation A-F is the Ledger at the topmost level, which all other Consolidations and Transactional Ledgers will roll up into. In this sample tree, blue identifies the Consolidations Ledger, gray identifies Transactional Ledgers, and light blue represents Eliminations Ledgers (EL).

Note: An Eliminations Ledger (with the name of the Consolidations Ledger and the letters "EL" at the end of the name) is automatically created for each Consolidations Ledger.    

CL_Info_03a.png

The Expand All and Collapse All buttons are available on the Set up Consolidations tab to expand/collapse the Ledger Hierarchy tree, as necessary.  

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Create a Hierarchy

Setting up a Consolidations hierarchy tree should be performed after you have added the Consolidations Ledger(s). Multiple Ledger Hierarchy trees can be set up. 

Note: When you access the Set up Consolidations tab, if you have Multi-currency enabled, the Currency column displays as part of the data grid. Otherwise, it will not display. 

  1. Navigate to Accounting Home and click the Run Reports tab. Then, under the Consolidations menu, click Set Up Consolidations.
  2. Click Create Hierarchy.  The Create Hierarchy dialog box displays.

    CL_03.png

  3. From the Ledger field, click the Lookup icon to search for and select the appropriate Ledger. Once the Ledger is selected, the Hierarchy Type automatically updates.
    Note: Only Consolidations-Transactional or Consolidations-Budget Ledgers can be selected from this drop-down.
  4. Search for and select the following required GL Accounts:
    1. Current Year Earnings GL Account
    2. Retained Earnings GL Account
    3. CTA GL Account (only displays if Multi-currency is enabled)
  5. (Optional) In the Notes textbox, enter notes that are related to this new Ledger Hierarchy. 
  6. Click Save. The Ledger Hierarchy screen refreshes with the newly created Hierarchy. 

Add a Ledger

After using the steps above to create a Hierarchy for the Ledger that will be at the topmost level, use the steps below to add a Ledger to continue creating a tree.  

Note: If you have Multi-currency enabled, the Currency column displays as part of the data grid. Otherwise, it will not display. 

  1. To continue creating a Ledger Hierarchy tree by adding a new Ledger, click the down-arrow on a Consolidations-Transactional or Consolidations-Budget Ledger, and select Add Ledger.

    SetupCL_01.png
    Note: Click here to view the above image in full screen. 

    The Add Ledger dialog box displays.

    CL_01.png

  2. From the Ledger field, click the Lookup icon to select a Ledger.
    Note: The type of Ledger that can be selected will depend upon the Parent Ledger. For example, if the Parent Ledger is a Consolidations-Transactional Ledger, you can select another Consolidations-Transactional Ledger or a Transactional Ledger. If the Parent Ledger is a Consolidations-Budget Ledger, only a Consolidations-Budget Ledger, or a Budget Ledger can be selected from the Ledger drop-down list. For additional information, refer to the Ledger Hierarchy considerations that are listed above.  
  3. Search for and select the following required GL Accounts:
    Note: If you select to add an existing Ledger that includes GL Accounts already added in the Default GL Accounts screen, the required GL Account fields will auto-populate in this dialog box.
    1. Current Year Earnings GL Account
    2. Retained Earnings GL Account
    3. CTA GL Account (only displays if Multi-currency is enabled)
  4. (Optional) In the Notes textbox, enter notes that are related to this new Ledger.
  5. Click Save or Save & New to add another Ledger and continue to build this Ledger Hierarchy tree, as necessary.  

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Edit a Ledger

Once a Ledger Hierarchy tree has been set up, the name can be edited and the sort order can be changed. Additionally, notes can be added or edited.

The sort order can be changed on a Consolidations-Transactional, Transactional, and/or Eliminations Ledger. Sort the order of rows in a tree by entering a number in the Modify Sort Order textbox on the Edit Ledger Hierarchy dialog box. 

  1. If you currently have the Set up Consolidations screen displayed, skip to step 2. Otherwise, navigate to Accounting Home and click the Run Reports tab. Then, under the Consolidations menu, click Set Up Consolidations.
  2. To view all of the existing Ledger Hierarchy trees or the hierarchy structure within a tree, click Expand All. 
  3. Click the down arrow on the Ledger that you want to edit. Then, click Edit.

    SetupCL_03.png
    Note: Click here to view the above image in full screen. 

    The Edit Ledger Hierarchy dialog box displays.

    CL_02.png

  4. Edit any or all of the following:
    1. Enter a different name to change the existing Ledger Hierarchy Name. This only changes the name in Consolidations. This does not change the name on the Ledger record.
    2. Click X to delete an existing GL Account, and then search for and select a different GL Account.
    3. Enter a different number to Modify Sort Order - enter a lower number to move the Ledger up in the row position or enter a higher number to move it down. For additional information, refer to the Ledger Hierarchy considerations that are listed above.  
    4. Add or modify notes that are related to this Ledger. 
  5. Click Save or Save & New to edit Ledger Hierarchy information for another Ledger.

Remove a Ledger

A Consolidations-Transactional Ledger, Transactional Ledger, Budget Ledger, and/or Consolidations-Budget Ledger can be removed. However, an Eliminations Ledger cannot be manually removed. It will automatically be removed when a Consolidations-Transactional or Consolidations-Budget Ledger is removed.

A Ledger Hierarchy that has associated transactions cannot be removed. Additionally, if the Run Consolidations has been performed, the Ledger Hierarchy cannot be removed. For additional information, refer to the Ledger Hierarchy considerations that are listed above.  

  1. If you currently have the Set up Consolidations screen displayed, skip to step 2. Otherwise, navigate to Accounting Home and click the Run Reports tab. Then, under the Consolidations menu, click Set Up Consolidations.
  2. To view all of the existing Ledger Hierarchy trees or the hierarchy structure within a tree, click Expand All.  
  3. Click the down arrow on the Ledger that you want to remove. Then, click Remove Ledger.

    SetupCL_04.png
    Note: Click here to view the above image in full screen. 

    The Remove Ledger confirmation dialog box displays.

    CL_06a.png

  4. Click Remove. A message displays when the Ledger has been removed and the screen refreshes with the Ledger removed. 

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Summer_23.png

Summer '23 Release

Release Notes and Schedule

When you add a new Ledger, if the GL Accounts listed below have already been added for the Ledger in the Default GL Accounts screen, these required fields will auto-populate from the Defaults GL Accounts screen.

  • Current Year Earnings GL Account
  • Retained Earnings GL Account
  • CTA GL Account (only displays if Multi-currency is enabled)

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