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Setting up Consolidation

Prerequisite

Before setting up Consolidation, determine how activities between entities or trading partners are handled.

The following table explains the choices for the elimination method:

Method Description Choose
Account Attributes An Intercompany accounts pay­able and accounts receivable (credit and debit) is required for each trading partner. When separate accounts are preferred. This method offers more touch-points and equal or higher granularity.
Level Dimensions (splits) Used to differentiate intercompany accounts. You must assign the trading partner dimension to all sheets used to enter data into these accounts. When a sub-account structure with fewer touch-points and moderate granularity are preferred.

The following is an example of intercompany transactions when your elimination method is set up for Account Attributes:

Example of Account Attribute Intercompany Transactions

The following is an example of intercompany transactions when your elimination method is set up for Splits:

Example of Dimensions (or splits) Intercompany Translations

Considerations: Choose your elimination method carefully. You can change this setting  any time, except in the following cases:

  • Existing elimination rules. Delete all elimination rules before changing this setting.
  • For level dimensions (splits) method, the trading partner dimen­sion cannot be in use on a sheet. Remove all references before changing this setting.
  • All existing trading partners are reset during the changeover. You must reconfig­ure them when changeover is complete.

Set up Consolidation

These are the high-level steps for setting up the consolidation process:

  1. Choose an elimination ( trading partner account identification) method. 
    1. Navigate to: Administration > System > General Setup. The Setup page appears.
    2. From Setup Details, choose one of the following from the Trading partner account identification option:
      • Use account attributes  (default)
      • Use splits
    3. Click Save.
  2. Define the organization levels required for eliminations and trading partners.
  3. Define the intercompany GL accounts
  4. Create elimination rules.
  5. Optional. Create journal entries.
  6. Optional. Create reclassifications.

Allocations

Allocation is the process of reassigning values (like income or headcount expenses) from one part of an organization to different parts of the organization. In Consolidation, this process is accomplished through allocation rules, which are created and managed from the Manage Allocation Rules page. You can access the Manage Allocation Rules page from the Administration page. 

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