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Consolidations

  • Updated

How do I produce Group Accounts?

Issue:

How do I assign accounts as bookkeeping accounts?

Resolution:

Group Accounts can be prepared for the first time by the following procedure:

  • Select the Set of Accounts of the Holding Company.
  • Create a number of Cost Centres: one for each Company being consolidated.
  • Tick the Holding Company for the first Cost Centre.
  • Make sure all the Subsidiaries and the Holding Company accounts are updated to the latest version of the Company master. This can be done by double clicking on each set of accounts in the “Client and Accounts” screen. The holding and subsidiary companies must have the same year-end date.
  • Go to File on the tool bar and select Consolidations from the drop down menu. (Note that, if this is not the first time you have consolidated these accounts, you will have saved the selection of Clients/Sets of Accounts and these will appear.)

Producing Group Accounts

  • Group Accounts can be prepared for the first time by the following procedure:
    • Select the Set of Accounts of the Holding Company.
    • Create a number of Cost Centres: one for each Company being consolidated.
    • Tick the Holding Company for the first Cost Centre.
    • Make sure all the Subsidiaries and the Holding Company accounts are updated to the latest version of the Company master. This can be done by double clicking on each set of accounts in the “Client and Accounts” screen. The holding and subsidiary companies must have the same year-end date.
    • Go to File on the tool bar and select Consolidations from the drop down menu. (Note that, if this is not the first time you have consolidated these accounts, you will have saved the selection of Clients/Sets of Accounts and these will appear.)
  • For the first time preparing these Group Accounts click on the Add button to bring up a list of all the Clients/Sets of Accounts with the same year end and with the same version of the Company master. Double click on your chosen Clients/Sets of Accounts.
  • Select each Subsidiary Company Sets of Accounts and enter a Cost Centre against in turn. Save the selection by pressing the Save button.
  • Press the Consolidate button and a new Group Set of Accounts will be created and opened. This Group Set of Accounts contains the aggregate amounts of the consolidated Companies in the Nominal Ledger and also in the Compliance Database where Group amounts are required. Amounts relating to the Holding Company in the Compliance Database will appear separately under the heading of Company. Other items in the Holding Company’s Compliance Database will be copied to the Compliance Database of the Group Set of Accounts. The word “Group” will be incorporated into the description of the Group Set of Accounts.
  • The Journals in the Group Set of Accounts will be all those listed in each of the consolidated Companies with one Journal per company. You may then post the group adjustments (using Cost Centre ZZZ) such as:
    • Cost brought forward of goodwill purchased on acquisition of subsidiaries
    • Depreciation brought forward of goodwill purchased on acquisition of subsidiaries
    • Depreciation charge for goodwill purchased on acquisition of subsidiaries
    • Elimination of investment on acquisition of subsidiaries
    • Elimination of share capital of subsidiaries owned by holding company
    • Elimination of inter-company sales/purchases
    • Elimination of inter-company opening/closing stock
    • Elimination of inter-company financial and trading balances
  • As these Group Accounts are the first produced, you should then make the group adjustments in the comparatives and (if a Consolidated Cash Flow Statement is being produced) in the pre-comparatives. You need to select Cost Centre ZZZ to make these adjustments. When you do the following year’s consolidation, you will not need to adjust the comparatives as these will be automatically applied from the previous year’s Group Accounts.
  • You should also review the Compliance Database of the Group Set of Accounts. In particular, remember to:
    • Adjust the tax reconciliation, because the Group profit will differ from the aggregate profit of all the companies, for example, by depreciation of goodwill on purchased acquisitions of subsidiaries and by the elimination of the profit on inter-company sales.
    • Under long term debtors – Amounts owed by group companies, make both entries zero.
  • You may then run the Group Accounts in the normal way from the Produce Accounts screen.
  • Also listed on the Produce Accounts screen will be the Consolidation Schedules, which show the make-up of the Group Balance Sheet balances from the Cost Centres representing the Holding Company, the Subsidiary Companies and the group adjustments (Cost Centre ZZZ).