Set up consolidation

Consolidation is set up and performed in each subsidiary company.

We recommend setting both the parent company and each subsidiary company to use the same number of accounting periods. Although this is not essential, it does help to keep track of your company's accounts over the same time period.

Before you begin

• Create the parent company.
• Set up the ledgers in the parent company.
• Create a Chart of Accounts in the parent company.
• If your subsidiary companies use a different currency to your parent company, set up the currency for each subsidiary in the parent company.

Enter consolidation settings

1. Specify the Parent Company of each subsidiary company in System Administration.
   1. Open System Administration.
   2. Select Companies.
   3. Select the company from the list that will be the subsidiary company. Right-click the company and select Properties.
   4. Select the parent company for this company from the Parent Company list.

2. Set up the Nominal Ledger for each subsidiary company.

   Open: Nominal Ledger > Utilities > Ledger Setup > Ledger Settings.

   1. Move to the Consolidation tab.
   2. Select Enable Consolidation to consolidate the subsidiary company into the parent company.

   3. Select the relevant currency setting.

      Although Nominal Ledgers only work in one base currency, you can have your subsidiary companies operating in different currencies and to that of the parent company. Foreign currency conversions are dealt with using the exchange rate set in the parent company.

      • Parent uses same base currency: Select this if the currency of the subsidiary company is the same as that of the parent company. This is set by default.

      • Parent uses different base currency: Select this if the base currency in this subsidiary company is different to the base currency in the parent company.

        • Select the base currency used by this subsidiary company from the list.

          If you do not select the correct currency, inaccurate postings will be made to the parent company.

          Note: The list displays the currencies that are set up in the parent company. The currency of this subsidiary company must be set up in the parent company.

Link your nominal accounts to the parent company

After you've entered the consolidation settings, you need to link your nominal accounts of the subsidiary company to the parent company.

Each nominal account in the subsidiary company must be linked to a nominal account in the parent company.

There are different ways to link nominal accounts from the subsidiary company to the parent company:

• Select the linked consolidated account for individual nominal accounts, as you create or amend your accounts.
• Use Amend Report and Consolidation Setting after you have created the nominal accounts, to quickly change category or nominal account codes.
• Apply default nominal accounts (in Nominal Ledger Settings), after you have created the nominal accounts.

Select the linked consolidated account for individual nominal accounts

You can select the consolidated account for each nominal account, when you create or amend the nominal account.

To do this, open the nominal account Account tab, then select the Consolidated Account - Code of the parent company nominal account that this account in the subsidiary should be linked to. The Code list shows the nominal accounts from the parent company.

See Link to a parent company (consolidated account).

Use the Amend Report and Consolidation Settings to link accounts

Use Amend Report and Consolidation Settings to quickly change the category code and consolidation code assigned to a nominal account.

Open: Nominal Ledger > Utilities > Ledger Set Up > Amend Report and Consolidation Settings.

Select the report category code (Category) box or Cons Code (Consolidation) account that you want to change, then select the new code from the list.

See Reassign report categories and consolidation codes.

Apply default nominal accounts

1. Open Nominal Ledger > Utilities > Ledger Setup > Ledger Settings and move to the Consolidations tab.

2. Select Apply defaults to create the links to the nominal accounts in the parent company automatically. The nominal accounts in your subsidiary company are linked to a nominal account in your parent company (with the same account code).

3. Select Use default cost centre to link to the cost centre you have created in the parent company to represent the subsidiary company. Select the cost centre from the Default cost centre drop-down list.

Sage 200 then automatically assigns consolidated nominal accounts, based on this cost centre. Your chart of accounts in the parent company must match the chart of accounts in the subsidiary company.

Use Amend Report and Consolidation Settings to view the linked nominal accounts and to make any necessary changes.

This overrides any existing consolidated account codes assigned to your subsidiary nominal accounts.

If at a later date you decide not to consolidate the ledger and clear the Enable Consolidation setting, the system will remove the default consolidation accounts from the subsidiary company's nominal accounts.