Financial Consolidation

[benny]

Hi Red1 and n2n,

I have searched the sourceforge forum and could'nt find much about financial consolidation and hopefully we can stir up some discussions on this topic here.

i have just tested 2.51e and is exploring ways to carry out financial consolidation.

My 2 cent worth of opinion on the procedure of consolidation should be:

First is to have a standardise Chart of Accounts to be use for multiple organisation.
Then set each subsidaries as organisation of the client.
A few of the financial report column should show year/period balance with segment value set to Org.

Another financial report column to be named as consol entries. The column should have posting type as statistical and segment value to be org. As such any GL journal of posting type=statistical will be reflected here.

The last report column can then sum up all the columns.

This method ensures that consolidation entries are not mixed up with actual posting. If the user need to review the consolidation entries, they can copy the previous batch of consolidation entries and reverse the entries that should be adjusted.

what do u guys think?

Anyway,I'm not that familiar with consolidation and is still struggling thru my consolidation references books! I'll try to update u guys if i have any more workarounds.

[benny]

Hi all,

i think Compiere financial reporting is such a flexible reporting tool that it can also support business segment reporting. Business segment reporting is essential for financial reporting, especially for Public Listed Companies.

By proper structure of organisation, the top level organisation can be the business segment (eg manufacturing / distribution) with the next level of organisation to be subsidiaries and the lowest level to be the department.

Do anyone have such experience in creating such reports? Maybe you can share with us on your case so that we can all learn.

[jaztek]

As a suggestion, you can add a consolidation entity (which will preserve your persistent consolidation entries such as your pre-acquisition reserves reversal or goodwill recognition) and post to this entity as normal (actuial postings). You may find it helpful when dealing with multiple GAAP jurisdictions to use different consolidation entities (organisations) and then have a report that includes or excludes the organisations for the various GAAP reports.

When dealing with multiple jurisdictions, I also use a little hack to keep the organisation currency and do document conversion not only to client currency but organisation currency - helpful if you anticipate having organisations in more than three countries.

Mike