Consolidation is functionality in the General Ledger module that allows you to combine/consolidate Accounting/Financial results of multiple companies from multiple set of books (SOB), Currencies, Calendars & Accounting flexfield structures.
In other words, Consolidation is a period-end process of combining the financial results of separate subsidiaries with the parent organization to form a single, combined statement of financial results.
Consolidated data is required at the end of year usually when companies prepare their balance sheets.
Overview of Consolidation:
- Consolidation of companies within a Set of Books
- Consolidation of companies across multiple Sets of Books in the same instance
- Consolidation of companies across multiple Sets of Books across multiple instances.
- Accounting for some companies is maintained in non-Oracle applications
- Same or Different Charts of Accounts
- Balances or Transactions
- Same or Different Calendar
- Same or Different Currency
- Balance Type
- Create Consolidation mapping: parent and subsidiary sets of books
- Post all Journals in subsidiary set of books
- Revalue foreign currency balances in subsidiary sets of books
- Translate subsidiary balances to the functional currency of parent set of books
- Run and review trial balance report
- Transfer data from subsidiary to parent
- Run Journal import
- Post the consolidation journal in parent set of books
- Eliminate inter company balances
- Run trial balance and other financial reports
To consolidate financial information of the businesses two consolidation tools are there i.e.
- FSG (Financial Statement Generator)
- GCS (Global Consolidation System)
As name itself says, GCS is used to consolidate financial information for different Financial Systems & Geographical locations, multiple ledgers including both owned application & legacy application.
FSG is used to consolidate financial information for businesses using single ledger as well as businesses using different ledgers that share the same Chart of Accounts & Calendar.
Below mentioned diagram is the example of Consolidation for Multiple countries i.e. U.S, Norway & India where Set of Books for multiple countries are consolidated.