CHAPTER 9: MULTICOMPANY OPERATIONS CONSOLIDATIONS...Dynamics NAV 5.0 database must be used. To restore the backup, follow these steps: 1. Locate and save the Consolidation.fbk file

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Chapter 9: Multicompany Operations - Consolidations

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CHAPTER 9: MULTICOMPANY OPERATIONS − CONSOLIDATIONS Objectives

The objectives are:

• Explain the capabilities of the consolidation feature and provide instructions for restoring the backup required to complete this section.

• Explain the set up required in the consolidated company and subsidiaries to perform consolidations.

• Explain the process of exporting data from business units located in other databases.

• Explain the processes of testing consolidation data from business units.

• Explain and run the batch jobs used to process consolidations. • Explain and demonstrate the process of preparing and posting

consolidation elimination entries. • Explain and run consolidation reports after the consolidation is

complete.

Introduction Consolidation means combining the financial statements of two or more separate companies (subsidiaries) into a consolidated financial statement. In Microsoft Dynamics� NAV 5.0, each individual company involved in a consolidation is called a business unit. The combined company is called the consolidated company, and is usually a company set up for only this purpose, holding no normal business transactions. In this section, the steps required to perform a consolidation are described, beginning with setting up the consolidated company and subsidiaries. Other consolidation processes, such as exporting and testing data, are described before the consolidation is performed. The final sections explain the need to process consolidation eliminations and provide a review of the consolidation reports available in Microsoft Dynamics NAV 5.0.


Finance in Microsoft Dynamics� NAV 5.0

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Consolidation Overview and Backup Restoration In Microsoft Dynamics NAV 5.0, consolidations can be performed:

• Across different charts of accounts. • Companies with different fiscal years. • Either the full amount or a specified percentage of a particular

company��s financial information. • Companies with different currency. • Using different methods of translating individual G/L account.

Companies can be consolidated that are:

• In the same database as the consolidated company. • In other Microsoft Dynamics NAV 5.0 databases. • In other accounting and business management programs, assuming

that the data from the other programs can be exported to a file with the appropriate format.

• In either a TXT file with fixed length fields or from an XML format.

Restore the Consolidation Backup A backup of the consolidation demo database is required to complete this section. The Consolidation.fbk file is available on the training manual download page of PartnerSource. The Consolidation.fbk contains three companies used in this section:

• CRONUS Consolidated Company • CRONUS International CONSOL • CRONUS Subsidiary

NOTE: To avoid expanding the database because of the restoration, a clean Microsoft Dynamics NAV 5.0 database must be used.

To restore the backup, follow these steps:

1. Locate and save the Consolidation.fbk file to a drive accessible to the database.

2. Open the Microsoft Dynamics NAV 5.0 database. 3. On the Tools menu, click Restore. 4. In the Restore window, locate and select the Consolidation.fbk file

and click Open.



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5. In the Restore window, click OK. 6. Click OK to the message that the backup was restored.

Set up the Consolidation Before performing a consolidation, the consolidated company must be set up. This company is set up the same way that other companies are set up, with its own chart of accounts and, if used, dimensions. The chart of accounts is independent of the chart of accounts in the other business units, and the chart of accounts in the individual business units may differ from one another. In this section, Microsoft Dynamics NAV 5.0 is set up to use consolidations, including:

• Set up consolidation information on G/L accounts • Set up subsidiaries as Business Units • Set up dimensions to be included in consolidations

NOTE: If a new company is used to consolidate subsidiaries, the Setup Checklist in Microsoft Dynamics NAV 5.0 can be used to copy the Chart of Accounts and other setup information to the new company.

Consolidation Information on G/L Accounts The chart of accounts in a subsidiary must specify accounts for consolidation. For each G/L account set up as a Posting account in a subsidiary, the G/L account of the consolidated company must be specified in the consolidation account fields. This mapping allows companies with different chart of accounts to be consolidated. The consolidation information is set up on the Consolidation tab of the G/L Account Card. This tab includes the following fields:



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Field Description Consol. Debit Acc. The account in the consolidated company which debit

balances on this account are to be transferred to. Consol. Credit Acc.

The account in the consolidated company which credit balances on this account are to be transferred to.

Consol. Translation Method

Identifies the currency translation rate to be applied to the account. The options are: Average Rate (Manual): The average rate for the period to be consolidated. The average is calculated either as an arithmetic average or as a best estimate and is entered for each business unit. Closing Rate: The rate which prevails in the foreign exchange market at the date for which the balance sheet or income statement is being prepared. The rate is entered for each business unit. Historical Rate: The rate of exchange for the foreign currency which prevailed when the transaction occurred. Composite Rate: The current period amounts are translated at the average rate and added to the previously recorded balance in the consolidated company. This method is typically used for retained earnings accounts because they include amounts from different periods and are thus a composite of amounts translated with different exchange rates. Equity Rate: Similar to Composite. The posting of the differences are to separate G/L Accounts.

If the balance must be transferred daily, specify account numbers for both the Consol. Debit Acc. and Consol. Credit Acc. fields because:

• Although amounts equal to zero are not transferred, an account whose final balance is zero might have had a non-zero balance on some dates.

• There can be a debit or credit balance for some dates even though the final balance for the consolidation period is expected to be a credit or debit balance.

If it is not required to differentiate between debit and credit balances for a particular account, use the same account number in both the Consol. Debit Acc. and Consol. Credit Acc. fields.



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Set up Consolidation Information on G/L Accounts To enter consolidation information on G/L accounts in a subsidiary company, follow these steps:

1. On the File menu, click Company > Open. 2. Click CRONUS Subsidiary and then click OK. 3. Click OK to the message regarding the demonstration company. 4. On the Navigation Pane, click Financial Management > General

Ledger > Chart of Accounts. 5. Locate and select a G/L account set with an Account Type of

Posting. 6. Click Account > Card. 7. Click the Consolidation tab. 8. In the Consol. Debit Acc. field, enter the relevant G/L account. 9. In the Consol. Credit Acc. field, enter the relevant G/L account. 10. In the Consol. Translation Method field, click the AssistButton

and select the relevant option for this account. 11. Repeat steps 8-10 for all Posting type accounts in this subsidiary. 12. Repeat steps 1-11 for each company subsidiary.

NOTE: Unless the consolidated company is a subsidiary of another company, it is not necessary to set up the consolidation debit and credit accounts in the consolidated company.

Business Unit Card Overview To consolidate several companies� financial data in a consolidated company, the subsidiaries must be set up as business units in the consolidated company. The business unit information is set up in the Business Unit Card window, accessed from the Navigation Pane by clicking Financial Management > General Ledger > Periodic Activities > Consolidation > Business Units.



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FIGURE 9.1 BUSINESS UNIT CARD WINDOW Consolidation processes are run from functions on the Business Unit Card window, including:

• Specifying exchange rates • Testing business units • Importing business units • Running consolidation reports

In this section, the fields on the Business Unit Card window are explained and the functions on the menu buttons are described. The General tab of the Business Unit Card includes the following fields:

Field Description Code A unique code to identify the business unit. When the consolidation

function imports information from the business units, this code is used to locate the relevant company.

Name A short description of the business unit. Company Name

Identifies the subsidiary to be linked with this business unit. To be used in consolidations, this name must match a company in Microsoft Dynamics NAV 5.0. Click the AssistButton to access a list of available companies.



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Field Description Currency Code Identifies the business unit��s local currency

(LCY). This code specifies how the consolidation feature reads the consolidation file. If a code is not specified, the amounts in the consolidation file are regarded as being LCY amounts. If a code is specified, the consolidated amounts are regarded as being denominated in that currency. If the foreign subsidiary is providing the translated financial statement, the Currency Code must be blank. The consolidation process regards the consolidated amounts as being denominated in LCY, and does not perform a translation.

Currency Exchange Rate

Indicates which currency exchange rate table Microsoft Dynamics NAV 5.0 uses while importing consolidation data. The options are: Local: The currency exchange rate table in the current company is used. Business Unit: The currency exchange rate table in the business unit��s company is used.

Consolidate Determines whether the business unit is included in the consolidation. If selected, the company is included in the consolidation.

Consolidation % Indicates the percentage of each account in this business unit to be included in the consolidation. If this field is empty, Microsoft Dynamics NAV 5.0 imports 100% of each account from the business unit.

Starting Date and Ending Date

Determines the period for which data is imported. Enter the starting date and ending date for the business unit's fiscal year if the business unit's fiscal year is different from the consolidated company's fiscal year.

Data Source Indicates whether the data is retrieved from the business unit in the business unit's local currency (LCY) or in its additional reporting currency (ACY).



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Field Description File Format Indicates in which file format the business unit

submits data if the business unit is in a separate database. If the business unit has version 3.70 or earlier of Microsoft Dynamics NAV, they will submit a .txt file. If they have version 4.00 or later, they will submit an .xml file.

The G/L Accounts tab contains the following fields:

Field Description Exch. Rate Gains Acc. and Exchange Rate Losses Acc.

Identifies the G/L accounts Microsoft Dynamics NAV 5.0 uses to post any exchange rate gains or losses.

Comp. Exch. Rate Gains Acc. and Comp. Exchange Rate Losses Acc.

Identifies the G/L accounts Microsoft Dynamics NAV 5.0 uses to post any exchange rate gains or losses that result from consolidation of accounts with a setting of Composite in the Consol. Translation Method field. If not specified, the accounts specified in the Exch. Rate Gains Acc. and Exch. Rate Loss Acc. fields are used.

Equity Exch. Rate Gains Acc. and Equity Exch. Rate Losses Acc.

Identifies the G/L accounts Microsoft Dynamics NAV 5.0 uses to post any exchange rate gains or losses that result from consolidation of accounts with a setting of Equity in the Consol. Translation Method field. If not specified, the accounts specified in the Exch. Rate Gains Acc. and Exch. Rate Loss Acc. fields are used.

Residual Account Identifies the G/L accounts Microsoft Dynamics NAV 5.0 uses to post residual amounts, which may occur because of importing data during a consolidation. For example, because of balance sheet beginning balance restatements.

Minority Exch. Rate Gains Acc. and Minority Exch. Rate Losses Acc.

Identifies the G/L accounts Microsoft Dynamics NAV 5.0 uses to post exchange rate gains or losses that result from consolidation of accounts from a business unit with minority shares. These fields are used if the Consolidation % for the business unit is less than 100. If not specified, the accounts specified in the Exch. Rate Gains Acc. and Exch. Rate Loss Acc. fields are used.

NOTE: The G/L account fields used during consolidation depend on the Consol. Translation Method specified on each G/L account card. If a Consol. Translation Method is not specified when new G/L accounts are created, Average is used.

The Bus. Unit button contains the List menu option that accesses a list of the existing business units.



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The Exch. Rates button accesses the three exchange rates used when consolidating the financial statements of business units if the financial statements are in a foreign currency. Exchange rates are explained in the Multicurrency section of the Finance content. The Functions button contains the processes for testing and importing the business units. Business unit data is tested prior to importing the data into the consolidated company. The menu options are:

Menu Option Description Test Database If the business units are existing companies in the current

Microsoft Dynamics NAV 5.0 database, this option is used to test the data in those business units.

Test File If the business units are maintained in other databases, this option is used to test the data in a file exported from those databases.

Import Database

Imports the consolidation data from the companies in the current Microsoft Dynamics NAV 5.0.

Import File Imports the consolidation data from the export file from the other database.

These functions are processed in the Test Data for Consolidation section. The Reports button contains the following consolidation reports:

Menu Option

Description

Eliminations Tentative trial balance report used prior to posting eliminations.

Trial Balance

Trial balance report including posted consolidation entries used by companies consolidating more than four business units.

Trial Balance (4)

Trial balance report including posted consolidation entries used by companies consolidating four or less business units.



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These reports are explained in further detail in the Process Consolidation Eliminations and Print Consolidation Reports sections.

Set up Business Units To set up business units in the consolidated company, follow these steps:

1. On the Navigation Pane, click Financial Management > General Ledger > Periodic Activities > Consolidation > Business Units.

2. Press F3. 3. In the Code field, enter a unique identifier. 4. In the Name field, enter a short description of the business unit. 5. In the Company Name field, click the AssistButton and select the

corresponding company. 6. In the Currency Code field, click the AssistButton and select the

relevant currency for this business unit. 7. In the Currency Exchange Rate field, click the AssistButton and

select the relevant exchange rate table. 8. Click to insert a check mark in the Consolidate check box to include

this business unit in the consolidation process. 9. In the Consolidation % field, enter the percentage of this business

unit to be included in the consolidation process. 10. If the fiscal year for this business unit is different from that of the

consolidated company, enter the business unit��s fiscal year in the Starting Date and Ending Date fields

11. In the Data Source field, click the AssistButton and select the LCY or ACY.

12. In the File Format field, click the AssistButton and select the relevant file format for this business unit.

To fill in the G/L Accounts tab, follow these steps:

1. Click the G/L Accounts tab. 2. In the Exch. Rate Gains Acct. field, click the AssistButton and

select the relevant account. 3. In the Exch. Rate Losses Acct. field, click the AssistButton and

select the relevant account. 4. In the Comp. Exch. Rate Gains Acct. field, click the AssistButton

and select the relevant account. 5. In the Comp. Exch. Rate Losses Acct. field, click the AssistButton

and select the relevant account. 6. In the Equity Exch. Rate Gains Acct. field, click the AssistButton

and select the relevant account. 7. In the Equity Exch. Rate Losses Acct. field, click the AssistButton

and select the relevant account.



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8. In the Residual Account field, click the AssistButton and select the relevant account.

9. If the business unit is less than 100%: a. In the Minority Exch. Rate Gains Acct. field, click the

AssistButton and select the relevant account. b. In the Minority Exch. Rate Losses Acct. field, click the

AssistButton and select the relevant account.

Include Dimensions in Consolidations Dimensions used by subsidiaries can be included in consolidations. However, there are many setup conditions. If consolidations of subsidiaries are not done using dimensions:

• Dimension set-up is not required in the consolidated company. • Dimensions must not be selected in any consolidation function or

report. If consolidations of subsidiaries are completed with dimensions where the subsidiary uses:

• The same dimensions as the consolidated company, then the dimensions must be set up in the consolidated company.

• Different dimensions than the consolidated company: � Dimensions must be set up in the consolidated company. � Dimensions in the subsidiary company must be mapped to the

dimensions in the consolidated company. In Microsoft Dynamics NAV 5.0, different dimensions are mapped in the subsidiary company using the Consolidation Code on the Dimensions or Dimensions Values window. For example, a Nordic business unit has separate dimension values for Denmark, Sweden, and Norway. The consolidated company only requires information for the consolidated Nordic region. To consolidate the dimension values for Denmark, Sweden, and Norway in this business unit into the Nordic dimension value in the consolidated company, the Dimension Value window is completed as follows:



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In the consolidated company:

Code Name Consolidation Code

NORDIC Sales Territory, Nordic In the subsidiary company:

Code Name Consolidation Code DENMARK Sales Territory, Denmark NORDIC NORWAY Sales Territory, Norway NORDIC SWEDEN Sales Territory, Sweden NORDIC

Set up Dimensions with Consolidation Codes To set up consolidations on dimensions, follow these steps:

1. On the File menu, click Database > Open. 2. Select the subsidiary company with dimensions, and click OK. 3. On the Navigation Pane, click Financial Management > General

Ledger > Setup > Dimensions > Dimensions. 4. On the View menu, click Show Column. 5. Select the Consolidation Code field and click OK. 6. For each dimension that must map to a different dimension, in the

Consolidation Code field, enter the corresponding Dimension Code used in the consolidated company.

To set up consolidations on dimension values, follow these steps:

1. In the Dimensions window, click the dimension to set up dimension values with consolidation information.

2. Click Dimension > Values. 3. On the View menu, click Show Column. 4. Select the Consolidation Code field and click OK. 5. For each dimension value that must map to a different dimension

value, in the Consolidation Code field, enter the corresponding Dimension Value Code used in the consolidated company.

NOTE: For more information about dimensions, refer to the Dimensions section of the Application Setup content.



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Short Answer Question: G/L Account Setup for Consolidations What is the purpose of setting up consolidation information on G/L accounts in the subsidiary companies?

Short Answer Question: Dimensions and Consolidations When dimensions are used in consolidations, and the dimensions are different in the subsidiary and consolidated companies, what setup must occur?



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Lab 9.1: − Set up Business Units Scenario CRONUS International Corporation owns 100% interest in CRONUS International CONSOL and just acquired 50% in another company as a subsidiary, called CRONUS Subsidiary. January 2007 will be reported with consolidated financial statements. Phyllis, the accounting manager, set up the chart of accounts in both companies and asked you to help with setup by entering the following business units:

• CRONUS Subsidiary � Code: SUB � 50% owned by CRONUS Consolidated Company � Same fiscal year as the parent company

• CRONUS International CONSOL • Code: INTC • 100% owned by CRONUS Consolidated Company • Same fiscal year as the parent company

Both subsidiaries:

• Have the same fiscal year and currency as the parent company. • Are within the same database using Microsoft Dynamics NAV 5.0. • Use account 3120 as the residual account.

HINT: Since the same currency is used, exchange rate accounts are not required.

Challenge Yourself!

1. Create the business unit for CRONUS Subsidiary as specified in the scenario.

2. Create the business unit for CRONUS International CONSOL as specified in the scenario.



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Lab 9.1: − Set up Business Units Scenario CRONUS International Corporation owns 100% interest in CRONUS International CONSOL and just acquired 50% in another company as a subsidiary, called CRONUS Subsidiary. January 2007 will be reported with consolidated financial statements. Phyllis, the accounting manager, set up the chart of accounts in both companies and asked you to help with setup by entering the following business units:



Both subsidiaries:



Need a Little Help?

1. Open the consolidated company. 2. Open the Business Unit Card window. 3. Create the business unit for CRONUS Subsidiary as specified in the

scenario. 4. Press F3. 5. Create the business unit for CRONUS International CONSOL as

specified in the scenario.



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Export Data for Consolidation If a business unit is located in another database, the consolidation data must be exported to a file before it can be consolidated. Each company must be exported separately. Microsoft Dynamics NAV 5.0 uses the Export Consolidations batch job for this purpose. In this section, the process of exporting consolidation data is explained.

Export Consolidation Batch Job Overview The Export Consolidation batch job processes all the entries in every G/L account in the following order:

1. For every combination of selected dimensions and date, the contents of the entries�� Amount fields are totaled and exported.

2. The next combination of selected dimensions and date with the same account number is processed.

3. The combinations in the next account number are processed, and so on.

The exported entries contain the following fields: Account No., Posting Date, and Amount. If dimensions information was also exported, dimension codes and dimension values are also included. For each exported line:

• If the total of the Amount fields is a debit, the account number that is set up in the business unit��s Consol. Debit Acc. field is exported to the line.

• If the total is a credit, the corresponding number in the Consol. Credit Acc. field is exported to the line.

• The date used is either the period��s ending date or, if the transfer takes place per day, the date of the calculation.

• Including dimensions, the value is the specified dimension or the value in the Consolidation Code field if the dimension is mapped to a Consolidation Code.

The Export Consolidation batch job is accessed on the Navigation Pane by clicking Financial Management > General Ledger > Periodic Activities > Consolidation > Export Consolidation, and includes the following fields:



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Field Description File Format Indicates the file format the business unit uses to submit

its data. If the business unit has version 3.70 or earlier of Microsoft Dynamics NAV, it will submit a .txt file. If the business unit has version 4.00 or later, it will submit an .xml file. The only reason to select the old format is if the parent company has not yet upgraded to Microsoft Dynamics NAV 4.0 or later.

File Name Identifies the name and location of the file (on diskette or hard disk) where the data is exported.

Starting Date and Ending Date

Identifies the first and last dates in the period from which entries will be exported. The period defined in these fields cannot exceed 500 days. If a closing date is used, the Starting Date and Ending Date must be the same.

Copy Dimensions Determines how dimension entries are to be classified when exporting to a consolidated company.

Parent Currency Code

Identifies the currency code of the company that will perform the consolidation.

Run the Export Consolidation Batch Job To run the Export Consolidation batch job, follow these steps:

1. On the File menu, click Database > Open. 2. Select the database that contains the subsidiary company to be

exported, and click OK. 3. On the Navigation Pane, click Financial Management > General

Ledger > Periodic Activities > Consolidation > Export Consolidation.

4. In the File Format field, click the AssistButton and select the relevant file format.

5. In the File Name field, click the AssistButton. 6. In the Export to XML (or Text) File window, select the location of

the export file and in the File Name field, enter a name for the file. 7. Click Save. 8. In the Starting Date field, enter the beginning date of the export. 9. In the Ending Date field, enter the ending date of the export. 10. If dimensions are to be exported, in the Copy Dimension field, click

the AssistButton. 11. For each dimension to copy, click to insert a check mark in the

Selected check box.



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12. Click OK to close the Dimension Selection window. 13. In the Parent Currency Code field, click the AssistButton and

select the parent company's currency. 14. Click OK to run the batch job.



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Lab 9.2: − Create a Consolidation Export File Scenario CRONUS Subsidiary is only 50% owned by the CRONUS Consolidated Company, and the other 50% is owned by a separate company. Phyllis, the accounting manager, is working at the CRONUS Subsidiary company location with their finance team and needs an export file to send to the parent company for their January 2007 consolidation. Create an .xml export file based on the following criteria:

• Name the file CRONUS Subsidiary_Jan07 and save to your desktop. • The other parent company uses the same currency but does not use

dimensions.

Challenge Yourself! Run the Export Consolidation batch job as specified in the scenario.



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Lab 9.2: − Create a Consolidation Export File Scenario CRONUS Subsidiary is only 50% owned by the CRONUS Consolidated Company, and the other 50% is owned by a separate company. Phyllis, the accounting manager, is working at the CRONUS Subsidiary company location with their finance team and needs an export file to send to the parent company for their January 2007 consolidation. Create an .xml export file based on the following criteria:


dimensions.

Need a Little Help?

1. Open the CRONUS Subsidiary company. 2. Open the Export Consolidation batch job. 3. Set the name and location of the export file as specified in the

scenario. 4. Set the period for January 2007. 5. Run the batch job.



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Test Data for Consolidation Before consolidating data, it is helpful to verify whether there are differences between the basic information in the business units and in the consolidated company. Data in business units can be tested:

• From exported files using the Consolidation - Test File report • Within the database using the Consolidation - Test Database report

Both batch jobs perform the same function and produce the same results. In this section, both reports are explained and reviewed.

Testing Data Both the Consolidation - Test File and Consolidation - Test Database reports review the business units� financial data. The reports then display the G/L accounts and the dimensions that are included in the consolidation period. The report displays error messages when accounts and dimensions are not set up correctly, including when:

• Either the consolidated debit or credit account specified on the G/L account in the subsidiary company is not set up as a G/L account in the consolidated company.

• The consolidation code for a dimension set up in the subsidiary is not a dimension in the consolidated company.

• The dimension in the subsidiary is not set up as a dimension in the consolidated company.

In addition, blank values appear on the report when either the consolidated debit or credit account is not entered on the G/L account in the subsidiary company. All errors must be corrected before the business unit is imported for consolidation.



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Correcting Data To correct accounts, ensure that the consolidation accounts in the subsidiary company are mapped to accounts that exist in the consolidated company. To correct dimensions, ensure that:

• In the subsidiaries, the correct consolidation codes are mapped to the appropriate dimensions in the consolidated company.

• The same dimensions and dimension values are set up in both the consolidated company and subsidiaries if the same dimensions are used.

Run the Consolidation − Test File Report To run the Consolidation - Test File report, follow these steps:

1. On the File menu, click Company > Open. 2. Select the consolidated company and click OK. 3. On the Navigation Pane, click Financial Management > General

Ledger > Periodic Activities > Consolidation > Business Units. 4. Locate and select the business unit with an export file to test. 5. Click Functions > Test File. 6. In the File Format field, click the AssistButton and select the

format of the file to be imported. 7. In the File Name field, click the AssistButton. 8. In the Import from XML (or Text) File window, locate the

exported file. 9. Click Open. 10. Click Preview to review the report on the screen, or click Print to

print the report.

Run the Consolidation − Test Database Report To run the Consolidation - Test Database report, follow these steps:


Ledger > Periodic Activities > Consolidation > Business Units. 4. Locate and select the business unit to test. 5. Click Functions > Test Database. 6. In the Filter field on the Code line, click the AssistButton and select

the relevant business unit to test. It is recommended to test each business unit individually.



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7. Click OK. 8. Click the Options tab. 9. In the Starting Date field, enter the beginning date of the test. 10. In the Ending Date field, enter the ending date of the test. 11. To test that dimensions are properly mapped, in the Copy

Dimension field, click the AssistButton. 12. For each dimension to test, click to insert a check mark in the

Selected check box. 13. Click OK to close the Dimension Selection window. 14. Click Preview to review the report on the screen, or click Print to

print the report.



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Lab 9.3: − Test the Consolidation Data Scenario In Lab 9.1 you set up the business units for the subsidiary companies. You now need to test each business unit to verify the set up. Test each business unit separately for January 2007, and preview each report on the screen. Since dimensions and currency are the same in all companies, it is not necessary to specify either in this test. The test report for CRONUS International CONSOL shows that there is an account missing consolidation information and that there are two accounts not set up in the CRONUS Consolidated Company. Make note of this information; it is corrected in Lab 9.4.

Challenge Yourself!

1. Run the Consolidation - Test Database batch job for the INTC company in the January 2007 period.

2. Preview the report and make note of any accounts missing data or with an error message.

3. Run the Consolidation - Test Database batch job for the SUB company in the January 2007 period.

4. Preview the report and make note of any accounts missing data or with an error message.



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Lab 9.3: − Test the Consolidation Data Scenario In Lab 9.1 you set up the business units for the subsidiary companies. You now need to test each business unit to verify the set up. Test each business unit separately for January 2007, and preview each report on the screen. Since dimensions and currency are the same in all companies, it is not necessary to specify either in this test. The test report for CRONUS International CONSOL shows that there is an account missing consolidation information and that there are two accounts not set up in the CRONUS Consolidated Company. Make note of this information; it is corrected in Lab 9.4.

Need a Little Help?

1. Open the CRONUS Consolidated Company. 2. Open the Business Unit Card window for the CRONUS

International CONSOL company. 3. Open the Consolidation - Test Database batch job. 4. Filter on the INTC code and the January 2007 period. 5. Preview the report and make note of any accounts missing data or

with an error message. 6. Run the Consolidation - Test Database batch job for the SUB

company in the January 2007 period. 7. Preview the report and make note of any accounts missing data or

with an error message.



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Lab 9.4: − Correct the Consolidation Data Scenario In Lab 9.3 you tested the data for both subsidiary companies and found the following errors in the CRONUS International CONSOL company:

• Account 1240 is missing consolidation accounts. • WIP/Job Sales accounts 2211 and 2212 do not exist in the

consolidated company. You contact Phyllis about the errors and are instructed to:

• Assign consolidation debit and credit accounts 1240 to account 1240. Verify that the consolidation method is set to Closing Rate.

• Assign WIP/Job sales accounts to the WIP Sales account used in the consolidated company. Verify that the consolidation method is set to Closing Rate.

After correcting these accounts, test the CRONUS International CONSOL business unit for January 2007 again.

HINT: Locate the WIP Sales account number in the CRONUS Consolidated Company using the Find function on the Toolbar.

Challenge Yourself!

1. Find the WIP Sales account number in the CRONUS Consolidated Company and make note of the number.

2. Update the accounts in the CRONUS International CONSOL company as specified in the scenario.

3. Run the Consolidation - Test Database batch job for the INTC company in the January 2007 period to verify there are no errors.



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Lab 9.4: − Correct the Consolidation Data Scenario In Lab 9.3 you tested the data for both subsidiary companies and found the following errors in the CRONUS International CONSOL company:







Need a Little Help?

1. Open the CRONUS Consolidated Company. 2. Open the Chart of Accounts window. 3. Use the Find icon on the Toolbar to find the WIP Sales account

number and make note of the number. 4. Open the CRONUS International CONSOL company. 5. Open the Chart of Accounts window. 6. Locate and open the G/L Account Card for account 1240. 7. Enter the consolidation information as stated in the scenario. 8. Locate and open the G/L Account Card for account 2211. 9. Enter the consolidation information as stated in the scenario. 10. Press PAGE DOWN to go to account 2212. 11. Enter the consolidation information as stated in the scenario. 12. Open the CRONUS Consolidated Company. 13. Open the Consolidation - Test Database batch job. 14. Filter on the INTC code and the January 2007 period. 15. Run the batch job and verify there are no errors.



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Process the Consolidation Once all errors from the test reports are corrected, data can be consolidated from:

• Exported files using the Import Consolidation from File batch job • Within the database using the Import Consolidation from DB batch

job Both batch jobs perform the same function and produce the same results. In this section, the batch jobs are explained and the run.

Consolidating Data Both the Import Consolidation from DB and Import Consolidation from File batch jobs process all the entries in the business unit included in the consolidation. When the batch job begins, a status message indicates which business unit, as well as which account number and date, is being processed. The batch job process update the G/L Entry table directly, there are no journal batches created to post in the consolidated company. Posted entries can be viewed on the Financial Management menu by clicking General Ledger > History > Registers. When the consolidation process is finished:

• Transactions for each account in the subsidiary are totaled. • The net amounts transferred to the consolidated company using the

accounts specified on the subsidiary's G/L account in the Consol. Debit Acc. or Consol. Credit Acc. fields.

Residual amounts are posted due to rounding differences that occur from the calculation of 50% of the business unit entry.

• /LI> If there are existing entries for the business unit in the consolidated company, they are overwritten and the following text is assigned: Changed by consolidation on (work date).

NOTE: Consolidating using multicurrency is explained in the Multicurrency section of the Finance content.



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Run the Import Consolidation from DB Batch Job To fill in the Import Consolidation from DB batch job, follow these steps:


Ledger > Periodic Activities > Consolidation > Business Units. 4. Locate and select the business unit to import. 5. Click Functions > Import Database. 6. In the Filter field on the Code line, click the AssistButton and select

the relevant business unit to import. It is recommended to import each business unit individually.

7. Click OK. 8. Click the Options tab. 9. In the Starting Date field, enter the first date in the period from

which entries are imported 10. In the Ending Date field, enter the last date in the period from which

entries are imported 11. If dimension detail is to be included in the consolidation, in the Copy

Dimension field, click the AssistButton. 12. For each dimension to include, click to insert a check mark in the

Selected check box. 13. Click OK to close the Dimension Selection window. 14. In the Document No. field, enter a number that appears on all the

entries that are imported. 15. Change the value in the Parent Currency Code field only if

currency codes in the business unit are different than the parent company's.

To run the batch job, follow these steps:

1. Click OK. 2. Click Yes to consolidate in the specified period. 3. If the consolidation period is not within the latest fiscal year in the

consolidated company, messages appear asking to continue. Click Yes to each message.



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To review the posted entries, follow these steps:

1. In the General Ledger folder, click History > Registers. 2. Locate and select the consolidation register. 3. Click Register > General Ledger. 4. Review the entries and then close the General Ledger Entries and

G/L Registers windows.

Run the Import Consolidation from File Batch Job To run the Import Consolidation from File batch job, follow these steps:


Ledger > Periodic Activities > Consolidation > Business Units. 4. Locate and select the business unit to import. 5. Click Functions > Import File. 6. In the File Format field, click the AssistButton and select the

format of the file to be imported. 7. In the File Name field, click the AssistButton. 8. In the Import from XML (or Text) File window, locate the

exported file. 9. Click Open. 10. In the Document No. field, enter a number that appears on all the

entries that are imported. 11. Click OK. 12. Click Yes to consolidate in the specified period. 13. If the consolidation period is not within the latest fiscal year in the

consolidated company, a message appears asking to continue. Click Yes.

To review the posted entries, follow these steps:

1. In the General Ledger folder, click History > Registers. 2. Locate and select the consolidation register. 3. Click Register > General Ledger. 4. Review the entries and then close the General Ledger Entries and

G/L Registers windows.



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Lab 9.5: − Consolidate the Subsidiaries Scenario January 2007 processing is complete and consolidated financial statements are ready to be run. Phyllis, the accounting manager, has given you the responsibility of managing consolidations because of your involvement with the set up. Consolidate the business units using the following criteria:

• Import each business unit individually. • Use a document number that represents the business unit and the

period (Jan07) for each consolidation. • Accept any messages when running the batch jobs.

After the consolidation is complete, review the registers.

Challenge Yourself!

1. Run the Import Consolidation from DB batch job for the INTC company as specified in the scenario.

2. Run the Import Consolidation from DB batch job for the SUB company as specified in the scenario.

3. Review the General Ledger entries for both consolidation registers.



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Lab 9.5: − Consolidate the Subsidiaries Scenario January 2007 processing is complete and consolidated financial statements are ready to be run. Phyllis, the accounting manager, has given you the responsibility of managing consolidations because of your involvement with the set up. Consolidate the business units using the following criteria:




Need a Little Help?

1. Open the CRONUS Consolidated Company. 2. Open the Business Unit Card for the CRONUS International

CONSOL business unit. 3. Open the Import Consolidation from DB batch job. 4. Filter on the INTC code and the January 2007 period. 5. Enter the document number as specified in the scenario. 6. Run the batch job, accepting any messages. 7. Press PAGE DOWN to go to the CRONUS Subsidiary business

unit. 8. Filter on the SUB code and the January 2007 period. 9. Enter the document number as specified in the scenario. 10. Run the batch job, accepting any messages. 11. Open the G/L Registers window. 12. Review the General Ledger entries for both consolidation registers.



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Process Consolidation Eliminations When all the financial data from the business units is imported to the consolidated company, the entries involving intercompany transactions must be eliminated. Processing consolidation eliminations consists of the following steps:

1. Calculate the eliminations. 2. Enter the elimination amounts in a general journal. 3. Run the G/L Consolidation Eliminations report to review the pending

elimination entries. 4. Post the general journal. 5. Run the G/L Consolidation Eliminations report to review the posted

results. Calculating the eliminations is a time consuming, manual process that may be aided by setting up specific intercompany accounts, intercompany customers/vendors, and intercompany posting groups. This section explains the general journal setup and G/L Consolidation Eliminations report, and then provides a demonstration of processing consolidation eliminations.

General Journal Setup The consolidation elimination entries are entered in the consolidated company using a journal batch that does not contain a check mark in the Copy VAT Setup to Jnl. Lines check box. It is important to use a journal batch with this set up because if an elimination entry is posted in a journal with the Copy VAT Setup to Jnl. Lines check box checked, a VAT entry is automatically posted. This is not correct since VAT is still chargeable on the transaction, even though it was an intercompany transaction.

G/L Consolidation Eliminations Report Overview The G/L Consolidation Eliminations report provides a tentative trial balance that shows the consequences of eliminating entries by comparing the entries in the consolidated company with the pending eliminations in the general journal. The G/L Consolidation Eliminations report is accessed from the Business Unit Card by clicking Reports > Eliminations. On the G/L Account tab, filters can be set on specific accounts and Global dimensions.



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The Options tab contains the following fields: Field Description

Starting Date Indicates the first date in the period from which posted entries in the consolidated company will be shown.

Ending Date Indicates the last date in the period from which posted entries in the consolidated company will be shown.

Business Unit Code

Identifies the business units to be included in the report.

Journal Template Name

Identifies the journal template that will be used for the unposted eliminations.

Journal Batch Identifies the journal batch that contains the unposted eliminations.

Show Determines whether the amounts are shown as a Net Change or as a Balance as of the current date.

When the report is run, each account appears following the structure of the chart of accounts. An account is not shown if the amount is zero for the reporting period. The following information is displayed for each account:

• Account No. and Name • If Business Unit Codes were entered on the Options tab:

� The first amount column displays totals for the consolidated company, excluding the selected business units and eliminations.

� The second amount column displays totals of the selected business units�� imported entries.

• If Business Unit Codes were not entered on the Options tab:

� The first amount column displays totals for the consolidated company excluding eliminations.

� The second amount column displays totals for the posted eliminations in the consolidated company.

• The third amount column displays totals for the consolidated

company with all the business units and posted eliminations. • The Eliminations column displays the elimination entries pending in

the general journal. A running total of the pending eliminations is shown at the bottom of each page of the report.

• The Description column displays the text entered in the Description field on the pending eliminations general journal.



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• The Total Incl. Eliminations column displays the consolidated company��s projected total after the pending eliminations are posted.

If the projected consolidated total for each account is reasonable, the pending eliminations in the general journal can be posted. Thus, the G/L Consolidation Eliminations report is similar to a journal test report.

Demonstration: Process and Review Elimination Entries Scenario: After running the consolidation process, Phyllis reviewed consolidation entries and found the following intercompany transaction that must be eliminated:

• On January 15, 2007, CRONUS International CONSOL sold items to CRONUS Subsidiary in the amount of 7500.00.

• Since CRONUS Subsidiary is only owned 50% by CRONUS International Corporation, only 50% of the amount must be eliminated.

Phyllis sets up a general journal batch for consolidations and then enters the following elimination entries:

Posting Date G/L Account Description Amount 01/31/07 2325 Eliminate Interco Sales -3750.00 01/31/07 6110 Eliminate Interco Sales 3750.00 01/31/07 5425 Eliminate Interco Sales 3750.00 01/31/07 7110 Eliminate Interco Sales -3750.00

Before the elimination entries are posted, the G/L Consolidation Eliminations report is run to review the results of posting these entries.

NOTE: Labs 9.1, 9.4, and 9.5 must be completed to perform this demonstration.

Steps To set up the general journal, follow these steps:

1. On the File menu, click Company > Open. 2. Select the CRONUS Consolidated Company and click OK. 3. On the Navigation Pane, click Financial Management > Setup >

General > Journal Templates. 4. With the General journal line selected, click OK. 5. Click Template > Batches. 6. Press F3 to insert a new batch.



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7. In the Name field, enter CONSOLELIM. 8. In the Description field, enter Consolidation Eliminations. 9. Click to remove the check mark in the Copy VAT Setup to Jnl.

Lines check box. 10. Click Open Journal.

To enter the elimination entries, follow these steps:

1. Ensure that the CONSOLELIM batch is selected. 2. In the Posting Date field, enter 01/31/07. 3. In the Document No. field, enter ELIM-JAN07. 4. In the Account No. field, enter 2325. 5. In the Description field, enter Eliminate Interco Sales. 6. In the Amount field, enter -3750.00. 7. Click the next line. 8. In the Account No. field, enter 6110. 9. In the Description field, press F8 to copy the description from the

above line. 10. In the Amount field, enter 3750.00. 11. Click the next line. 12. In the Document No. field, enter ELIM-JAN07. 13. In the Account No. field, enter 5425. 14. In the Description field, press F8. 15. In the Amount field, enter 3750.00. 16. Click the next line. 17. In the Account No. field, enter 7110. 18. In the Description field, press F8. 19. In the Amount field, enter -3750.00.

NOTE: The Business Unit Code field in the journal lines must be blank so that the elimination entries are not included as imported consolidation entries in the G/L Consolidation Eliminations and the Consolidated Trial Balance reports.

To review the G/L Consolidation Eliminations report prior to posting the journal, follow these steps:

1. On the Financial Management menu, click General Ledger > Periodic Activities > Consolidation > Business Units.

2. With either business unit selected, click Reports > Eliminations. 3. Ensure that no filters are set on the G/L Account tab. 4. Click the Options tab. 5. In the Starting Date field, enter 01/01/07.



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6. In the Ending Date field, enter 01/31/07. 7. Leave the Business Unit Code field empty so that both subsidiaries

appear. 8. In the Journal Template Name field, click the AssistButton and

select General. 9. Click OK. 10. In the Journal Batch field, click the AssistButton and select

Consolidation Eliminations. 11. Click OK. 12. Ensure that Net Change is selected to Show. 13. Click Preview. 14. Review the entries in the Total, Eliminations, Description, and

Total Incl. Eliminations columns. 15. Close the Print Preview and Business Unit Card windows.

To post the elimination entries, follow these steps:

1. On the General Journal window, click Posting > Post. 2. Click Yes to post the journal lines. 3. Click OK and close the General Journal, General Journal

Batches, and General Journal Templates windows. To review the G/L Consolidation Eliminations report with posted entries, follow these steps:

1. On the Financial Management menu, click General Ledger > Periodic Activities > Consolidation > Business Units.

2. With either business unit selected, click Reports > Eliminations. 3. Click the Options tab. 4. Ensure that the same filters are set as when previously run. 5. Click Preview. 6. Review the entries in the Posted Eliminations column. 7. Close the Print Preview and Business Unit Card windows.



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Sequencing Activity: Process Consolidation Eliminations Task: Put the following steps of eliminating intercompany consolidation entries in order. Step _____ : Enter the amounts in a general journal. Step _____ : Post the general journal. Step _____ : Calculate the eliminations. Step _____ : Review the posted elimination entries in the G/L Consolidation Eliminations report. Step _____ : Review the pending elimination entries in the G/L Consolidation Eliminations report.

Print Consolidation Reports Once the eliminations are posted, the consolidated trial balance report for the consolidated company can be printed. There are two reports:

• Consolidated Trial Balance • Consolidated Trial Balance (4)

In this section, both reports are explained and run.

Consolidation Reports Overview The consolidation reports in Microsoft Dynamics NAV 5.0 are: Report Description Consolidated Trial Balance

This report is recommended for a consolidated company that has more than four business units. Net change and balance information for each account before and after eliminations as well as the posted eliminations for each account. The totals for each business unit for a specific account are displayed on separate lines.

Consolidated Trial Balance (4)

This report is recommended for a consolidated company that has four or less business units. Information for each account is displayed on a single line. The totals for each business unit for a specific account are displayed in separate columns. Due to the limits of the page width, select either balance or net change information, not both. The information selected is then displayed for each account before and after eliminations as well as the posted eliminations for each account.

NOTE: Due to the limits of the page width, large numbers may not display in the reports. By selecting to show the reports in whole 1000s, all large numbers are likely to be displayed.



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Print the Consolidation Trial Balance Report To print the Consolidation Trial Balance report, follow these steps:


Ledger > Periodic Activities > Consolidation > Business Units. 4. Locate and select the business unit. 5. Click Reports > Trial Balance. 6. On the G/L Account tab, set account filters and global dimension

filters for the report. 7. Click the Options tab 8. In the Starting Date field, enter the first date in the period from

which posted entries in the consolidated company are shown. 9. In the Ending Date field, enter the last date in the period from which

posted entries in the consolidated company will be shown. 10. Click to insert a check mark in the Amounts in Whole 1000s check

box to display amounts in whole 1000s. 11. Click Preview to review the report on the screen, or click Print to

print the report.

Print the Consolidation Trial Balance (4) Report To print the Consolidation Trial Balance report, follow these steps:


Ledger > Periodic Activities > Consolidation > Business Units. 4. Locate and select the business unit. 5. Click Reports > Trial Balance (4). 6. On the G/L Account tab, set account, global dimensions, and

business unit filters for the report. 7. Click the Options tab.



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8. In the Starting Date field, enter the first date in the period from which posted entries in the consolidated company are shown.

9. In the Ending Date field, enter the last date in the period from which posted entries in the consolidated company will be shown.

10. Click to show amounts as a Net Change or as a Balance as of the current date.

11. Click to insert a check mark in the Amounts in Whole 1000s check box to display amounts in whole 1000s.

12. Click Preview to review the report on the screen, or click Print to print the report.



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Lab 9.6: − Print the Consolidated Trial Balance Scenario The consolidation process is complete:

• Data from business units is imported. • Consolidation eliminations are posted.

It is now time to run the January 2007 trial balance for the CRONUS Consolidated Company using the following criteria:

• Select the appropriate report for this consolidation. • Do not filter on accounts, global dimensions, or business units. • Show amounts as Net Change.

Preview the report, it is not necessary to print.

Challenge Yourself! Run the trial balance for reporting four or less business units based on the criteria specified in the scenario.



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Lab 9.6: − Print the Consolidated Trial Balance Scenario The consolidation process is complete:

• Data from business units is imported. • Consolidation eliminations are posted.




Need a Little Help?

1. Open the CRONUS Consolidated Company. 2. Open the Business Unit Card window. 3. Access the trial balance for reporting four or less business units. 4. Enter the report criteria as specified in the scenario. 5. Run the report.



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Summary In this section, the processes of combining the financial statements of two or more subsidiaries into a consolidated financial statement were described. Once the set up of the consolidated company and subsidiaries was explained, the process of exporting a file from Microsoft Dynamics NAV 5.0 was described. This is useful when subsidiaries are stored in separate Microsoft Dynamics NAV 5.0 databases. After testing the business units to ensure there were no errors, the consolidation process was completed. The final sections explained processing consolidation eliminations and then reviewed the consolidation reports. The consolidation feature in Microsoft Dynamics NAV 5.0 enables related companies to create a consolidated company for financial reporting purposes.



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Test Your Knowledge − Multicompany Operations − Consolidations

1. Which field must be blank when posting elimination entries in the

general journal?

a. Description b. Document No. c. Business Unit Code d. External Document No.

2. In Microsoft Dynamics NAV 5.0, which file types are used when

importing or exporting consolidation data?

a. .doc b. .xml c. .net d. .txt

3. What set up must occur on the general journal batch used to post

elimination entries?

a. Copy VAT Setup to Jnl. Lines check box must not contain a check mark.

b. No. Series must be set up. c. Copy VAT Setup to Jnl. Lines check box must contain a check

mark. d. Allow VAT Differences check box must contain a check mark.

4. Which of the following fields are set up on G/L accounts used in

consolidations?

a. Consol. Translation Method b. Consol. Debit Acc. c. Consol. Transaction Method d. Consol. Credit Acc.

Fill in the Blanks Instruction: Fill in the blanks to test your knowledge of this section.

1. The Consolidated Trial Balance report is recommended for companies consolidating more than ___ business units.

2. Data is consolidated into the consolidated company using the _____ Consolidation from File or DB batch job.



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Lab 9.1 − Solution: Set up Business Units Scenario CRONUS International Corporation owns 100% interest in CRONUS International CONSOL and just acquired 50% in another company as a subsidiary, called CRONUS Subsidiary. January 2007 will be reported with consolidated financial statements. Phyllis, the accounting manager, set up the chart of accounts in both companies and asked you to help with set up by entering the following business units:



Both subsidiaries:



Step by Step

1. On the File menu, click Company > Open. 2. Select the CRONUS Consolidated Company and click OK. 3. On the Navigation Pane, click Financial Management > General

Ledger > Periodic Activities > Consolidation > Business Units. 4. In the Code field, enter SUB. 5. In the Name field, enter CRONUS Subsidiary. 6. In the Company Name field, click the AssistButton and select

CRONUS Subsidiary. 7. Click OK. 8. In the Consolidation % field, enter 50. 9. Click the G/L Accounts tab.



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10. In the Residual Account field, enter 3120. 11. Click the General tab. 12. Press F3. 13. In the Code field, enter INTC. 14. In the Name field, enter CRONUS International CONSOL. 15. In the Company Name field, click the AssistButton and select

CRONUS International CONSOL. 16. Click OK. 17. Click the G/L Accounts tab. 18. In the Residual Account field, enter 3120. 19. Press TAB or ENTER. 20. Close the Business Unit Card window.



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Lab 9.2 − Solution: Create a Consolidation Export File Scenario CRONUS Subsidiary is only 50% owned by the CRONUS Consolidated Company, the other 50% is owned by a separate company. Phyllis, the accounting manager, is working at the CRONUS Subsidiary company location with their finance team and needs an export file to send to the parent company for their January 2007 consolidation. Create an .xml export file based on the following criteria:


dimensions.

Step by Step

1. On the File menu, click Company > Open. 2. Select the CRONUS Subsidiary company and click OK. 3. Click OK to the message regarding the demonstration data. 4. On the Navigation Pane, click Financial Management > General

Ledger > Periodic Activities > Consolidation > Export Consolidation.

5. In the File Name field, click the AssistButton. 6. In the Save in field, click the AssistButton and select Desktop. 7. In the File Name field, enter CRONUS Subsidiary_Jan07. 8. Click Save. 9. In the Starting Date field, enter 01/01/07. 10. In the Ending Date field, enter 01/31/07. 11. Click OK.



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Lab 9.3 − Solution: Test the Consolidation Data Scenario In Lab 10.1 you set up the business units for the subsidiary companies. You now need to test each business unit to verify the set up. Test each business unit separately for January 2007, and preview each report on the screen. Since dimensions and currency are the same in all companies, it is not necessary to specify either in this test. The test report for CRONUS International CONSOL shows that there is an account missing consolidation information and that there are two accounts not set up in the CRONUS Consolidated Company. Make note of this information; it is corrected in the Lab 10.4.

Step by Step


Ledger > Periodic Activities > Consolidation > Business Units. 4. Locate and select CRONUS International CONSOL company. 5. Click Functions > Test Database. 6. In the Filter field on the Code line, click the AssistButton and select

INTC. 7. Click OK. 8. Click the Options tab. 9. In the Starting Date field, enter 01/01/07. 10. In the Ending Date field, enter 01/31/07. 11. Click Preview to review the report on the screen. 12. Make note of the following errors:

• Account 1240 is missing consolidation accounts. • Accounts 2211 and 2212 do not exist in the consolidated company.

1. Close the Print Preview window. 2. Locate and select the CRONUS Subsidiary company. 3. Click Functions > Test Database. 4. In the Filter field on the Code line, click the AssistButton and select

SUB. 5. Click OK.



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6. Click the Options tab. 7. In the Starting Date field, enter 01/01/07. 8. In the Ending Date field, enter 01/31/07. 9. Click Preview to review the report on the screen. 10. Note that there are no errors on the report. 11. Close the Print Preview window.



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Lab 9.4 − Solution: Correct the Consolidation Data Scenario In Lab 10.3 you tested the data for both subsidiary companies and found the following errors in the CRONUS International CONSOL company:







Step by Step


Ledger > Chart of Accounts. 4. Click the Name field and then click the Find icon on the Toolbar. 5. In the Find What field, enter WIP Sales. 6. Click Find Next, if the Find function is not set to Find As You Type. 7. Note that the WIP Sales account No. is 2210. 8. Close the Name - Find and Chart of Accounts windows. 9. On the File menu, click Company > Open. 10. Select the CRONUS International CONSOL company and click OK. 11. Click OK to the demonstration data message. 12. On the Navigation Pane, click Financial Management > General

Ledger > Chart of Accounts. 13. Locate and select account 1240. 14. Click Account > Card.



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15. Click the Consolidation tab. 16. In the Consol. Debit Acc. field, enter 1240. 17. In the Consol. Credit Acc. field, enter 1240. 18. Verify that the Consol. Translation Method is set to Closing Rate. 19. Close the G/L Account Card window. 20. Locate and select account 2211. 21. Click Account > Card. 22. Click the Consolidation tab. 23. In the Consol. Debit Acc. field, enter 2210. 24. In the Consol. Credit Acc. field, enter 2210. 25. Verify that the Consol. Translation Method is set to Closing Rate. 26. Press PAGE DOWN to go to account 2212. 27. In the Consol. Debit Acc. field, enter 2210. 28. In the Consol. Credit Acc. field, enter 2210. 29. Verify that the Consol. Translation Method is set to Closing Rate. 30. Close the G/L Account Card and Chart of Accounts windows. 31. On the File menu, click Company > Open. 32. Select the CRONUS Consolidated Company and click OK. 33. On the Navigation Pane, click Financial Management > General

Ledger > Periodic Activities > Consolidation > Business Units. 34. Locate and select CRONUS International CONSOL company. 35. Click Functions > Test Database. 36. In the Filter field on the Code line, click the AssistButton and select

INTC. 37. Click OK. 38. Click the Options tab. 39. In the Starting Date field, enter 01/01/07. 40. In the Ending Date field, enter 01/31/07. 41. Click Preview to review the report on the screen. 42. Verify that there are no other errors and the close the Print Preview

and Business Units windows.



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Lab 9.5 − Solution: Consolidate the Subsidiaries Scenario January 2007 processing is complete and consolidated financial statements are ready to be run. Phyllis, the accounting manager, has given you the responsibility of managing consolidations because of your involvement with the set up. Consolidate the business units using the following criteria:




Step by Step


Ledger > Periodic Activities > Consolidation > Business Units. 4. Locate and select CRONUS International CONSOL business unit. 5. Click Functions > Import Database. 6. In the Filter field on the Code line, click the AssistButton and select

INTC. 7. Click OK. 8. Click the Options tab. 9. In the Starting Date field, enter 01/01/07. 10. In the Ending Date field, enter 01/31/07. 11. In the Document No. field, enter INTC_Jan07. 12. Click OK. 13. Click Yes to consolidate in the specified periods. 14. Press PAGE DOWN to go to the CRONUS Subsidiary business

unit. 15. Click Functions > Import Database. 16. In the Filter field on the Code line, click the AssistButton and select

SUB. 17. Click OK. 18. Click the Options tab. 19. In the Starting Date field, enter 01/01/07. 20. In the Ending Date field, enter 01/31/07.



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21. In the Document No. field, enter SUB_Jan07. 22. Click OK. 23. Click Yes to consolidate in the specified periods. 24. Close the Business Unit Card window. 25. In the General Ledger folder, click History > Registers. 26. For the first consolidation register, click Register > General Ledger. 27. Review the entries. 28. Close the General Ledger Entries window. 29. For the second consolidation register, click Register > General

Ledger. 30. Review the entries. 31. Close the General Ledger Entries and G/L Registers window.



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Lab 9.6 − Solution: Print the Consolidated Trial Balance Scenario The consolidation process is complete:

• Data from business units are imported. • Consolidation eliminations are posted.




Step by Step


Ledger > Periodic Activities > Consolidation > Business Units. 4. With either business unit selected, click Reports > Trial Balance

(4). 5. Ensure there are no filters set on the G/L Account tab 6. Click the Options tab. 7. In the Starting Date field, enter 01/01/07. 8. In the Ending Date field, enter 01/31/07. 9. Ensure that Net Change is selected. 10. Click Preview to review the report. 11. Close the Print Preview and Business Unit Card windows.



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Quick Interaction: Lessons Learned Take a moment and write down three Key Points you have learned from this chapter: 1.

2.

3.



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Solutions Set up the Consolidation

Short Answer Question: G/L Account Setup for Consolidations MODEL ANSWER - Map the subsidiary Chart of Accounts to the consolidated company's Chart of Accounts.

Short Answer Question: Dimensions and Consolidations MODEL ANSWER - The corresponding dimension or dimension value code in the consolidated company is entered in the Consolidation Code field on the dimension or dimension value in the subsidiary company. Process Consolidation Eliminations

Sequencing Activity: Process Consolidation Eliminations Task: Put the following steps of eliminating intercompany consolidation entries in order. Step 1: Calculate the eliminations. Step 2: Enter the amounts in a general journal. Step 3: Review the pending elimination entries in the G/L Consolidation Eliminations report. Step 4: Post the general journal. Step 5: Review the posted elimination entries in the G/L Consolidation Eliminations report.



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Test Your Knowledge − Multicompany Operations − Consolidations

1. Which field must be blank when posting elimination entries in the

general journal?

a. Description b. Document No. c. Business Unit Code d. External Document No.

2. In Microsoft Dynamics NAV 5.0, which file types are used when

importing or exporting consolidation data?

a. .doc b. .xml c. .net d. .txt

3. What set up must occur on the general journal batch used to post

elimination entries?

a. Copy VAT Setup to Jnl. Lines check box must not contain a check mark.

b. No. Series must be set up. c. Copy VAT Setup to Jnl. Lines check box must contain a check

mark. d. Allow VAT Differences check box must contain a check mark.

4. Which of the following fields are set up on G/L accounts used in

consolidations?

a. Consol. Translation Method b. Consol. Debit Acc. c. Consol. Transaction Method d. Consol. Credit Acc.



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Fill in the Blanks Instruction: Fill in the blanks to test your knowledge of this section.

1. The Consolidated Trial Balance report is recommended for companies consolidating more than ___ business units. [Answer: four]

2. Data is consolidated into the consolidated company using the _____ Consolidation from File or DB batch job. [Answer: Import]

Documents

CHAPTER 9: MULTICOMPANY OPERATIONS CONSOLIDATIONS...Dynamics NAV 5.0 database must be used. To restore the backup, follow these steps: 1. Locate and save the Consolidation.fbk file