Alternate Hierarchy Use Cases - Intercompany Eliminations with Multiple Hierarchies

For reporting purposes there may be a need to create multiple company hierarchies with different intercompany Eliminations requirements. This section discusses how to accommodate additional hierarchies and best practices associated with intercompany Eliminations and reporting in Planful.

Use Cases:

1. You have a Legal Company hierarchy and another hierarchy for Management reporting, but intercompany Eliminations for both hierarchies are different because of the way the companies are grouped for reporting purposes.

2. You have a consolidated company view and a consolidated division view (where companies are grouped by division), but intercompany Eliminations between the two views is not unique.

Solution:

The following is a description of a Managed Rollup (Hierarchy 1) and a Divisional Rollup (Hierarchy 2).

In Hierarchy 1, the Elimination Entries need to be posted to Elim1 whereas in Hierarchy 2, the Elimination Entries need to be posted to Elimination companies Elim2, Elim3, and Elim4.

To handle this requirement in Planful, complete the following steps:

1. Setup one of these hierarchies as the Main hierarchy and the other as an Alternate hierarchy in Hierarchy Management.

2. Setup Elimination companies in the Main hierarchy to support the consolidation requirements of that structure.

3. Flag a company as an Elimination company on an Alternate hierarchy (even though this same company is setup as a non-Elimination company on the Main hierarchy) to support the consolidation requirements of that structure.

4. Run the Elimination process. based on where the Elimination companies are placed in the respective hierarchies (Main or Alternate), the system will eliminate properly and populate the data against the Elimination companies in each hierarchy to support complete reporting requirements.

5. Generate the different reporting views based on hierarchy selected. Selecting the required hierarchy (Main or Alternate) will determine the eliminating companies displayed on the report.