Intro to Consolidation

Access the Consolidation Control Panel

All of your Consolidation tasks will be carried out in the Consolidation Control Panel.

Your Admin user will provide you with security. There are two types of Consolidation users:

• Centralized - If you are at the root member (defined as the top member in the hierarchy) then you are interacting as a Centralized user managing the Consolidation Process in its entirety.
• Decentralized - If you have been provided specific dimension member access within the hierarchy and you select a Company from the member selector, then you are interacting in Decentralized mode. This means that the modules available may be restricted and you have limited access to Company intersections for modifying data.

Click the Consolidation icon shown below in blue to access the Consolidation Control Panel.

Dissecting the Consolidation Control Panel

The Consolidation Control Panel is organized by Process. Click Processes (located in the left pane) to view associated details in the center pane.

Entry Actions, located in the right pane, are available based on selections made in the center pane. Process approval details are displayed in the right pane. After all the processes are posted/processed successfully, you mark them as Complete. When you mark a process Complete, the grid becomes empty and all the processes are locked from editing. Also, no actions are available for locked processes.

Description of Fields on the Consolidation Control Panel

Scenario - You can run Consolidation for any specific scenario or scenarios. 

Period - Consolidation tasks relate to dates or time periods. Click the Calendar button to select a month and year.

Entity Lock / Unlock icon - Indicates a locked or unlocked company. Once a company is closed they are locked and therefore not editable.

Entity - Access to dimension members here is based on user type; Centralized or Decentralized. 

Left Pane

Processes Pane :

• Standard Journals - Standard Journal entries are created for processing one-time journal entries. You can add Standard Journals to Budget scenarios.
  
  
• Recurring Journals - Recurring Journal entries will not vary across time and can be automated for each period within your process. For example, if you have an annual expense (such as rent) you can accrue the expense in twelve equal payments every month with a Recurring Journal Entry. A debit and credit to the appropriate segment intersections will be created every month.
  
  
• Dynamic Journals - Dynamic Journal entries are used when entry balances fluctuate from period to period. For example, as a financing strategy, you take out a loan with a variable interest rate. This means that the principal and interest payments will likely fluctuate from period to period based on the loaded rate for the period.
  
  
• Non Controlling Interest -Describes the relationship between a parent company and a subsidiary (otherwise referred to as joint ventures or minority interest relationships), the related accounts, and Dynamic Journal entries used in adjusting the investment in the subsidiary. The calculations and postings take place during the Consolidation Process.
  
  
• Reclassifications - Reclassification Entries are usually used to correct financial information that has been incorrectly posted against an intersection within the database. For example, if $500 was recorded in the wrong GL account, you can move the amount to the correct GL account with a Reclassification Entry.
  
  
• Eliminations - Elimination Sets are comprised of due to and due from accounts that make up an intercompany transaction. Eliminations are processed individually or together as part of the Elimination Process. The Elimination Process calculates and posts Elimination Entries at Eliminating Companies within your legal entity hierarchy to ensure the proper aggregation of financial information at consolidated reporting levels. For example, a transaction that involves the sale of an item manufactured by a subsidiary to another subsidiary should be eliminated when reporting consolidated results.
  
  
• Consolidation Process - Run the Consolidation Process. If a Centralized User runs the Consolidation Process, all company/legal entities will be updated for the selected scenario and time periods. If a Decentralized User runs the Consolidation Process, only the selected company/legal entity(s) will be updated for the selected scenario and time periods. If Consolidation Status is implemented in your application, click here to read all about it. If you are not sure if Consolidation Status is implemented, click Consolidation Process. If the center pane displays the company hierarchy with a period at the top of each column, then this feature is enabled. If the center pane is blank, it is not enabled.

• Actual Data Load - Displays the Actual Data Load grid containing the Actual Data Templates. Using the Actual Data Load process, you input actual budget data in the available templates.

See: How to Input Actuals.

Right Pane

Entry Actions: Select the checkbox next to entries to perform an Entry Action. These actions are available based on where you are within the Consolidation Process and your security privileges. Entry Actions allow you to control the lifecycle of a journal. Entry Actions are available based on your selections. For example, if you want to post an Elimination Set, select the checkbox next to the Elimination Set and click the Post Entry Action.

Type of Entry Actions:

• Forward - submit an entry for review. Select a journal entry that is in process and click Forward to move the entry to pending review.
• Send Back - return a journal entry to an In Process status to make required changes. This option is only available when the journal is in the Pending Review or Approved state.
• Approve - approve a pending journal entry, which confirms the entry for posting.
• Reject - refuse a journal entry. You can edit a rejected journal, select it, and click the In Process entry action.
• Process - calculate the value of a selected journal entry and post it to the database.
• Clear Data - delete previously processed Elimination data.
• Post - post the entry to the application.
• Inactive - disable an entry (such as a Dynamic Journal Entry, an Elimination Set, or a Non Controlling Interest). Disabled/Inactive entries are not posted.
• Active - make an Inactive entry Active. Only active entries are posted.
  
  Reports - Reports are available based on Process. Some examples of reports include; Verify Data, Audit Log, and Exchange Rate.

Center Pane

When you click a process, for example, Dynamic Journals, the center pane is displayed. All entries for Dynamic Journals are displayed based on scenario, period, and company selections. The Status column (shown below) provides information on whether the entry is active or inactive. Only active entries can be processed.

The Show All toggle, when turned off, displays all Active and Inactive journals in the selected period. When turned on, all journals for all periods are shown.

Show All Turned Of

Show All Turned On

If you click the Consolidation Process and the Workflow Status feature is enabled, a company hierarchy with a period at the top of each column is displayed as shown below. If this feature is not enabled, the pane will be blank.

Activities that Complete During Consolidation Processing

When you run Consolidation, the bullet points below happen. However, you have the option to define a Custom Consolidation Process. Click here for information.

• Process Dynamic Journals in local and common currency
• Process Non Controlling Interest
• Calculate the minority interest expense and liability accounts for Non Controlling Interest
• Calculate the investment in the subsidiary for Non Controlling Interest in local and common currency
• Process required partitions in the reporting database
• Calculate Retained Earnings for all companies in local currency
• Calculate currency translation adjustments
• Process interim currencies
• Calculate Retained Earnings for interim currencies
• Calculate currency translation adjustment for interim currencies
• Reporting members with assigned currency values, exchange rates, and calculation types are converted.
• Process reporting cube

Custom User-Defined Consolidation Process 

With the User Defined Consolidation Process feature, you can configure and personalize your Close process. For example, you can balance books at local and common currencies during your Close process and require interim and reporting currencies to get processed after Consolidation is complete. For Budget and Forecasts, you have the flexibility to run the Consolidation Process for specific financial years (period range) for the scenario versus all years.

Without the Custom User-Defined Consolidation Process, the Consolidation Process runs conversions and other calculations for common currency, local currency, interim currency, and reporting currency all at once in a big chunk. For example, let’s say you wanted to post Eliminations, Dynamic Journals (in common currency), and Reclassifications. You have to run the Consolidation Process, then Eliminations, and then the Consolidation Process again so that interim and reporting currency would reflect the eliminated intercompany transactions. With the User Defined Consolidation Process, you can process local currency and common currency, post Eliminations and common currency adjustments (if any), and then consolidate interim and reporting currency.

Follow the steps in the Process Consolidation with Configurable Steps topic below. Alternatively, run the Consolidation Process from Cloud Scheduler. You can choose Interim Currency and Reporting Currency by selecting the Configurable Steps option shown below.

Process Consolidation With Configurable Steps

To learn about processing consolidation, click here. 

Post Eliminations During the Consolidation Process

Optionally, include Eliminations (along with Dynamic Journals, Non Controlling Interest, Interim Currencies, and Reporting Currencies) in the Consolidation Process, which can then be scheduled to run in Cloud Scheduler. This eliminates the need for manual execution, however, you can continue to post Eliminations independently as well. Having both options provides additional flexibility and convenience.

Active Elimination Sets are processed and posted during the processing of common currency in the Consolidation Process. More specifically, the sequence of execution within the Consolidation Process is as follows:

1. Local Currency
2. Common Currency
3. Interim Currency
4. Reporting Currency

During the processing of Common Currency, the following happens:

• Local currency is converted to common currency
• Dynamic Journals Posting
• Non Controlling Interest Calculations
• Active Elimination Sets are processed and posted - this happens the first time Elimination Sets are posted and for subsequent Consolidation processing the Elimination Sets are first cleared and then posted.
• Current Year Retained Earnings calculations
• Beginning Retained Earnings calculations
• Hyperinflationary Company Processing
• CTA calculations

If the posting of any Eliminations fails during the Consolidation Process, the entire process fails. If a Cloud Scheduler task includes the posting of Eliminations for a company and the Elimination company under the rollup company is deleted at some point in time, the Cloud Scheduler task will fail. To resolve this issue, update the existing Cloud Scheduler task and uncheck the Eliminations checkbox. Save it and run it again.

In Practice

1. Access the Consolidation Control Panel.
2. Select the Consolidation Process.
3. Click the Process action. The Process Setup page appears as shown below.
4. Select the Eliminations checkbox and click Process or set up a Cloud Scheduler process. Note that the Eliminations checkbox is only available/visible in the selected company is a rollup and has an Elimination company as one of its descendants.

Clear Eliminations Posted as Part of the Consolidation Process

When Eliminations are posted as part of the Consolidation Process, the only way to clear Elimination postings is to perform the following steps.

1. Access the Consolidation Control Panel.
2. Click the Eliminations Process in the left pane. Eliminations are shown in the center pane.
3. Select an Elimination and click the Clear Data action as shown below.

Clearing Dynamic Journals and Non Controlling Interest Posted as Part of the Consolidation Process

When you select to process Dynamic Journals and Non Controlling Interest as part of the Consolidation Process, the Consolidation Process will not clear data for inactive artifacts (Dynamic Journals and Non Controlling Interest).

Process Consolidation Without Configurable Steps

You can set up a process in Cloud Scheduler or run Consolidation from the Consolidation Control Panel. For Centralized Consolidation, all company/legal entities will be updated for the selected scenario and period when Consolidation is run. For Decentralized Consolidations, only the selected company/legal entity(s) will be updated for the selected scenario and period when Consolidation is run.

1. Select Consolidation Process from the Processes pane.
2. Select Process from the Entry Actions pane.
   
   
   
3. The Process Setup page opens. Scenario selection includes Actual, Budget, and Forecast scenario types. If the Actual scenario is selected then the Year and Period selections are applicable. If Budget/Forecast scenario types are selected then the Year selection is disabled and a single period is displayed for processing. You can select this to process all of the periods within a Budget or Forecast scenario type.
4. Select a Year to drive periods displayed for processing.
5. Select from the list of available periods based on the Scenario and Year selections. Locked periods are not available for selection.
6. Click Process to execute the Consolidation Process. Once the Consolidation Process is complete, a Process Status page will appear indicating whether or not the process was successful.

There are prerequisites that must completed before you can process consolidations, which include:

• Post Journal Entries
• Execute Intercompany Eliminations
• Update Foreign Currency Exchange Rates
• Define Consolidation Setup selections

Explanation of Journal Types

There are three types of journals; Standard, Recurring, and Dynamic.

• Standard Journal Entries are entries created for processing one-time journal entries. Recurring Journal Entries do not vary across time. Standard Journals can also be of Auto-Reversing type to post subsequent periods.
• Recurring Journal Entries do not vary across time and can be automated and consistently applied for each period within your process. For example, if you have an annual expense (such as rent) you can accrue the expense in twelve equal payments every month with a Recurring Journal Entry. A debit and credit to the appropriate segment intersections will be created every month.
• Dynamic Journal Entries are used when entry balances fluctuate from period to period. For example, as a financing strategy you may take out a loan with a variable interest rate. This means that the principal and interest payments may fluctuate from period to period based on the loaded rate for the period.