This document presents an overview of the configuration activities for M3 Group Consolidation.
Use the outcome to carry out the process described in Managing Group Consolidation.
Define Basic Settings for Subsidiary for M3 Group Consolidation
First, set the basic consolidation rules for the subsidiary company. This includes selecting:
Program used: 'Settings – Subsidiary' (GMS010).
Select Conversion Method for Balance Accounts
If you want to convert the cumulative balance of each period balance using the exchange rate valid at the end of each period, you must select alternative 1='Cumulative conversion' for each balance account to consolidate in 'Accounting Identity. Open' (CRS630/F).
In the USA, such conversion is required as part of the financial reporting under the GAAP standard. The conversion normally applies to equity accounts. Note that this solution requires that the subsidiary does not convert its balances to the parent company's currency, but instead lets the parent company do the currency conversion.
The default value is alternative 2, which causes the balance of each period to be converted at the exchange rate valid during the last (current) period.
Configure Transfer of General Ledger and Budget Transactions in Group Consolidation
For each subsidiary, you must define how to handle general ledger and budget transactions during transfer to the parent company. This includes defining:
Programs used: 'Settings – Transfer of General Ledger' (GMS015) and 'Settings – Transfer of Budget' (GMS020).
Define Conversion of Subsidiary's Chart of Accounts
If the subsidiary's chart of accounts differs from the one used by the parent company, you register the parent company's differing accounts. For each account, you define one or more ranges of the subsidiary company's accounts to be totaled in the parent company's accounts when transferring all the transactions in the range.
Although this activity is done per subsidiary, normally the account conversion rules are owned by the parent company.
Program used: 'Account Conversion. Open Table' (GMS100).
Register Subsidiary in Parent Company
In the parent company, you register information about each subsidiary that is necessary for the parent company to receive transactions. This includes registering contact information, the consolidation currency and the percentage of the holding of each account that the subsidiary sends to the parent company.
Program used: 'Settings – Parent Company' (GMS090).