Intercompany and consolidation

Intercompany transactions identify the originating and counterparty entities, type, agreed currency and amount. AR Clerk raises sales and recharges; Treasury Analyst raises loans, repayments, transfers and settlements. Supporting evidence describes the charge or movement.

The legacy Period field identifies the from-side period; it does not replace the explicit periods for both entities. A shared amount reduces differences but does not prevent disputes about acceptance, timing, classification or conversion.

Submission posts the from-side journal. Counterparty AP Clerk confirms a charge; counterparty Treasury Analyst confirms funding or settlement. The confirmer differs from the raiser and has authority for that entity. Only confirmation authorises its to-side posting.

Intercompany Awaiting My Confirmation holds pending decisions. Rejection records a reason and routes to Controller. A correction or cancellation addresses affected journals through linked reversals or approved adjustments. It cannot silently edit one side while leaving the other unchanged.

Intercompany balances compares both entities’ balances by pair, currency and reporting context. Timing differences retain their entity periods and evidence. Controller coordinates agreement or dispute resolution before consolidation readiness is satisfied.

Each entity revalues its foreign monetary balance under its own rate and accounting policy. Revaluation items retain allocated current carrying values and revaluation settlements tracks their release on settlement. Agreement in transaction currency does not guarantee equal translated amounts: functional currencies, rate types, timing and policies can differ.

Consolidation runs identify the Group unit and reporting context; its linked journals use an eligible group posting period. Consolidation entities record the included entity periods, close status, ownership and method used. Preliminary runs may use soft-closed entity data; final lock requires the stated hard-close and approval conditions.

Translated balances retain each entity account’s source balance, rate type, used rate and reporting value. Closing and historical policies follow reviewed group configuration. Income uses actual dated rates or an assessed suitable average; material volatility can require dated translation. Any balancing translation adjustment is identified in the group’s designated account with its workings.

Elimination entries removes supported intra-group activity: sales and related cost, receivables and payables, funding balances, investment and equity, and other documented consolidation adjustments. Each entry retains its transaction or adjustment basis. Non-controlling interest uses the reviewed ownership policy.

A residual is investigated rather than presumed to disappear because the transaction matched. The correction may belong in an entity’s eligible period or in a documented group adjustment. Reasons, evidence, accounts and approval remain attached. Group journals never bypass the subsidiary’s hard-close controls.

The preparing Controller reviews the Consolidation Worksheet and submits the run. A different authorised Controller checks source periods, rates, translation, eliminations and adjustment approvals before signing. The preparer cannot approve their own result through delegation.

Lock freezes the reviewed run and its used-rate versions. An entity correction after a preliminary run supersedes that basis and requires recalculation. Later changes to locked output follow the logged correction path. Group statements and audit exports identify which approved version they use.

Entities record ownership and consolidation method. Full, equity or any other supported treatment must be verified against the group’s accounting requirements during configuration. Sub-groups use an explicit reporting context and supported period mapping; selecting a method does not establish regulatory suitability.