Accounting and Localization mailing list archives

Re: Fwd: Consolidating legal entity

AD LIBITOM, michel Guénard
- 04/07/2016 16:58:48
Some basics from accounting practice:
first: Accounting consolidation requires a common set of accounts across all entities. This set of account can be totally different from the ones used in the various entities, provided a matching schedule is in place and followed by all entities
second: the accounting principles used by each entity must be the same;
    for instance you cannot consolidate 2 inventories of products, one using FIFO and the other one using LIFO.
    or you cannot consolidate fixed assets and their corresponding methods of amortization if they significantly differ in terms of life span or amortization plans.
    you do not either add sales including taxes in one company with sales out of taxes from another one.

This is because the consolidated B/S and P/L for the aggregate must make sense for their expected users and readers; you do not sum potatoes and carrots unless your are preparing a soup

Le 07/04/2016 21:52, Mike Savoya a écrit :

I have this question if someone could help?

  1. is it possible to consolidate several legal entities in our reporting?
  2. if Yes - what if there is different chart of account for each legal entity 
Thank you in advance