Following is a column definition for a consolidated income statement.
Consolidating entries elimination
A casual review of business news won’t take long to reveal a story about one business buying another.
Such acquisitions are common and number in the thousands annually.
This would put you in the position of either implementing a new system for your legal entity that supports consolidation from other systems, or implementing a consolidation tool that is separate from your ERP environment.
The separate consolidation tool category includes Adaptive Planning, a tool that is certainly very popular.
In this example, five accounts are eliminated during consolidation: 142600, 211400, 401420, 401180, and 510820.
Different companies set up their intercompany accounts differently.
Column D includes only the elimination accounts for CEU company and Column E includes eliminations for CEED company.
Both Column D and E are set to NOT print on the financial statement.
To do that would take significant resources and someone in the corporate dictator role to make the change happen.
That could be possible with your organization – in most companies it is not.
The CTA account captures the difference between these two exchange rates in US$.