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Consolidate companies with different fiscal periods

How to setup Management Reporter to consolidate companies with different fiscal periods in Dynamics GP?

When consolidating two companies with different fiscal periods you need a calculation column for the Income Statement and an adjustment to Retained Earnings for the Balance Sheet. This scenario was included in our 3rd White Paper in the Consolidation Accounting Series for Dynamics GP, “Eliminations and Adjustments using Reporting Ledgers in Microsoft Dynamics GP® and Management Reporter“. To adjust Retained Earnings a separate Reporting Ledger was setup in Dynamics GP.

The following excerpt for our white paper provides an example of a Consolidated Balance Sheet. The adjustment to Retained Earning in Subsidiary Two (to adjust the subsidiaries July to June fiscal period to the parent companies calendar fiscal period) was made to a separate reporting ledger called “LOCAL”.

Balance Sheet Column Definition

The Balance Sheet column definition requires the use of a Reporting Tree to map each column to a specific company. To bring in the correct period, March 31, for Subsidiary Two’s fiscal period of July – June, a change in the BASE fiscal period (BASE+6) was required. To map to the Parent’s General Ledger (BASE) and Adjust and Elim ledger (IFRS), an Attribute Filter was added to column B and E.

Note: when using reporting ledgers, if no attribute is added, both ledgers are included in the same column. What you do not see in the Column Definition is the use of the Reporting Ledgers in Subsidiary Two. This column returns the net balance from both reporting ledgers, BASE (General Ledger) and LOCAL (Adjust and Elim Ledger) used in Subsidiary Two.

An adjusting entry is required for Subsidiary Two to restate its Net Income and Retained Earning to the Parent Company’s Calendar Year fiscal period for Consolidation. The following entries were made the Reporting Ledger, LOCAL, at the end of Q1 and Q2. Without this Adjustment, the Consolidated Income Statement would not roll up to Net Income in the Consolidated Balance Sheet.


Account 000-9999-00 was created to adjust Net Income in the Consolidated Balance Sheet.

The setup and process used to produce this Consolidated Balance Sheet can be applied to many consolidation scenarios and takes advantage of Reporting Ledgers in Dynamics GP and Management Reporter. The complete setup is outlined in our 3rd White Paper in the Consolidation Accounting Series for Dynamics GP.

Summary

Managing elimination entries for multiple subsidiaries requires more than just a link to an Excel spreadsheet. With the increased focus on audit trails and internal controls for SOX compliance, Dynamics GP’s addition of Reporting Ledgers provides the needed controls for Consolidation Accounting.

This white paper is intended for Accounting and Financial users and consultants that are responsible for producing consolidated financial statements in Dynamics GP and Management Reporter.

Request a free copy “Eliminations and Adjustments using Reporting Ledgers in Microsoft Dynamics GP® and Management Reporter” at http://unifiedbiz.com/eliminations-gp-mr/