Search HansaManuals.com HansaManuals Home >> Standard ERP >> Consolidation Previous Next This text refers to program version 8.4 Introduction to the Consolidation Module The Consolidation module will be useful if you need to produce consolidated financial statements for a group of companies. In this context, a group of companies is a collection of parent and subsidiary companies that, through a common source of control, function as a single financial entity.The aim of consolidated financial statements is to show the performance of the group as if it were a single entity. All intra-group transactions (sales from one group company to another group company, for example) and intra-group balances (inter-company loans, for example) need to be eliminated as otherwise the consolidated financial statements would double-count these balances. Doing so typically requires a complex set of eliminating and consolidating entries to work back from individual financial statements toward a group financial statement that is an accurate representation of operations. The Consolidation module in Standard ERP is designed so that information in subsidiary companies can be made available to certain reports in the holding company without the need physically to transfer any subsidiary company information to the holding company. This makes it very easy to produce consolidated reports from the holding company, and removes the risk of error inherent in copying information from one company to another. This communication between companies means that the holding and subsidiary companies must reside in the same database. The module supports multi-level consolidation: subsidiary companies can have their own subsidiary companies. Subsidiaries can be wholly or partially owned, and the ownership percentage may change over time. In this documentation the holding company will be referred to as the "Mother Company" and the subsidiaries as "Daughter Companies". Subsidiaries owned by Daughter Companies will be referred to as "Grand-Daughter Companies". In some circumstances, the requirement to have the Mother and Daughter Companies in the same database might not be practical. If so, the Consolidation module also contains a 'Consolidation' Export function, which you can use to export Transaction information from a Daughter Company to a text file. You can then import this text file to the Mother Company (in another database). The basic steps required to set up the Consolidation module are as follows:
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