Entity and ownership management

Define the reporting boundary

Start with the legal entities whose results belong in the group. Record each entity’s functional currency, reporting calendar and source ledger identity. Keep legal ownership separate from a display hierarchy: a parent name on an organisation chart does not determine the accounting method. Reporting groups provide geographic or divisional cuts without causing an entity to be counted again in the group total.

An acquisition, divestiture or reorganisation needs an effective date and supporting decision. A proposed ownership change stays separate from the active relationship until the Group Controller reviews the current revision. The approved method can require a configured specialist workpaper; the system must not choose consolidation treatment from an ownership percentage alone.

Each close belongs to one reporting group. Freeze its membership and effective entity population with the calculation; the same entity may appear in another group without mixing their adjustments or published results. A proposed ownership change has no effect until independently approved.

Preserve the terms of an earlier close

An ownership record has an effective interval. The close freezes the relationship versions used, including acquisitions and disposals inside the reporting period. Later master-data changes affect a new calculation or a future period through an explicit revision. They cannot rewrite an already published group result.

For a simple common-equity subsidiary, the reviewed non-controlling share follows the approved allocation basis. Tiered holdings, changes of control and different share rights require an approved method and supporting workpaper. Where the configured method cannot represent the actual structure, the close records that requirement as unresolved before calculation or publication.

Map local accounts to the group chart

Each Subsidiary Controller proposes mappings for their own ledger. The Consolidation Manager checks the group account, effective dates and explanation. An unmapped balance stays an import exception with its original local account and amount. It is not assigned to a suspense account merely to finish the import.

Mapping intervals must be unambiguous. A local account cannot resolve to two active group accounts for the same effective date. Changing an approved mapping invalidates affected open calculations and creates a new review trail; it leaves an accepted historical submission and its preserved mapping snapshot available for comparison.

Check the structure before calculation

The hierarchy must reject cycles, self-ownership, invalid percentages and overlapping relationship intervals. A valid percentage is necessary but insufficient: the Group Controller also confirms the applicable method and acquisition evidence. Consolidation groups freeze membership at the close boundary, and shared entities appear once in a group calculation.

For example, moving a subsidiary between management divisions can change a segment report while leaving the legal parent unchanged. Keep those decisions distinct. The people loading the entity directory may configure records, but they do not receive authority to approve ownership policy or reopen a locked close. A repeated approved-change command returns the original effective relationship rather than creating another interval.