Consolidating financial statements eliminations
For example, if one company owns just 30 percent of the other's stock, but the two companies share employees or have substantial transactions between them, that's evidence that one associate company can exert indirect control over the other.
You may have to use consolidated accounting in this situation.
Many organizations need to prepare financial statements that report on multiple companies in a consolidated format.
Management Reporter can help a company consolidate their data across one Microsoft Dynamics ERP, multiple Microsoft Dynamics ERPs, or across ERPs.
Next create a row definition, ensuring that all appropriate accounts in all companies are included in the rows.
For this consolidation method, all companies will need to be using a Dynamics ERP (Dynamics AX, Dynamics GP, or Dynamics SL) but it can be a mix of these various Dynamics ERPs.
You will need to verify that each Dynamics ERP company has been set up in Management Reporter.
All ERPs use a data mart, so the companies are integrated or imported from the Configuration Console.
When consolidating the group's financial statements, you only report income and expenses from outside of the group of companies.
Intra-group trading activity, such as a sale by the parent to the subsidiary, is eliminated as these transactions effectively cancel each other out.
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To illustrate, suppose you buy a 30-percent interest in a business for $500,000.