The Consolidation feature allows you to combine several entities into one client file (the parent company) for the purpose of publishing consolidated financial statements.
You must ensure that the map numbers for the parent company and subsidiaries are assigned uniformly and then Working Papers takes care of the rest.
There are three ways to consolidate files in Working Papers.
Real-time Consolidation (Internal)
Consolidation can be done within a file at multiple levels and updated in real-time. Although the process of combining subsidiary client files that are maintained separately from the consolidated file can still be used, many situations exist where it is far more practical and efficient to combine and consolidate accounts for different types of entities in one file.
Batch Consolidation (External)
Working Papers creates a link from the consolidated file to client files maintained externally. This is useful if records for the combined entities are entered and updated on different computers or networks. Once the individual client files are completed, the entities are consolidated into one file. Note that if externally maintained client files are included in the entity structure, they must be physically in the file path you specified each time you re-consolidate.
- If externally maintained client files are included in the entity structure, they must be physically in the file path you specified each time you re-consolidate.
- Internal and external consolidations are compatible with SmartSync, even in synchronized child files. However, making changes to the consolidation structure or running a reconsolidation requires an online connection to the parent file.
Combining Batched Files and Real-time Files
Working Papers can combine and consolidate a file that is a mixture of both real-time and batch files.
In addition to creating separate consolidation files, consolidation can be done within a file at multiple levels that are updated in real time. With automatic consolidated reports, consolidated files can be quickly organized, maintained, and extended to different types of non-financial accounting.
Use this command to consolidate two or more files into the active client file. Entities are structured according to a generally accepted tree structure (e.g. Windows Explorer and Working Papers Document Manager) allowing for any number of branches.
Each entity identifier is included in a separate field that appears as a prefix to the account number but is not combined with the account number. Therefore, the account number can be identical to the number used by the actual entity.
Combination accounts do not really exist in the database, but instead, are accumulated on display using the logic of the map number and tree system. These map numbers are used in the preparation of consolidated financial statements as the charts of accounts from the consolidated companies automatically roll up to the parent company by map number. Where possible, it is advantageous to ensure similar charts of accounts exist in the files to be consolidated.
Any adjustments entered in the individual client files are reflected in the consolidated balances but the actual transactions are not part of the consolidated file. If adjustments have been made to individual entities since the last consolidation, they will be marked with a warning symbol next to the entity.
Period movement is brought from subsidiaries into the consolidated file. When the parent has a reporting period that is not active in the subsidiary company, the parent's balances are based on the smallest incremental reporting period in the subsidiary. For example, if the Parent entity is set up as a yearly file, and the subsidiary is set as a monthly file and a quarterly file, during consolidation, the subsidiary's monthly balances populate the yearly amounts in the parent.