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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Consolidation
Small and medium business | Business Central, N...
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Consolidation

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Posted on by BZ-03050753-0 68
I have just created a new company in BC, How can I define it as a subsidiary company.
 
Also I need to get consolidation reports as financial consolidation so how can I link between The main company and this company.
Categories:
Dynamics 365 Business Central
Dynamics 365 Business Central
  • Suggested answer
    Valentin Castravet Profile Picture
    Valentin Castravet 25,025 Super User 2024 Season 2 on at
    Consolidation
    Please refrain from posting AI-generated answers. The response is not accurate and doesn't describe the functionality available in Business Central.
  • Suggested answer
    Saif Ali Sabri Profile Picture
    Saif Ali Sabri 381 on at
    Consolidation

    1. Setting Up the Subsidiary Company in Microsoft Dynamics:

    • Create the New Legal Entity:

      • Go to Organization administration > Organizations > Legal entities.
      • Select New to create a new company.
      • Fill in the details for your new company, such as name, company ID, address, and other relevant information.
      • Save the company as a legal entity.

    • Assign Ownership and Link to Parent Company:

      • In the legal entity setup, you can add relevant ownership details, indicating that this new company is a subsidiary of the main company.
      • Microsoft Dynamics doesn’t have a specific "subsidiary" label, but you’ll establish this connection through your organizational structure and financial reporting setup.

    • Define Reporting Currency:

      • Set the functional currency for the subsidiary, especially if the BC company operates in a different currency than the parent company.

    2. Configuring Intercompany Transactions:

    To handle transactions between the main company and the subsidiary:

    • Setup Intercompany Accounting:

      • Go to General ledger > Setup > Posting > Intercompany accounting.
      • Define the accounts that will be used for intercompany transactions between your main company and the subsidiary.
      • Set up intercompany accounts for receivables, payables, and other financial transactions.

    • Intercompany Sales and Purchases:

      • You can enable automatic creation of intercompany transactions between the main company and the subsidiary.
      • Use intercompany sales/purchase orders to record transactions between the two companies, ensuring proper elimination during consolidation.

    3. Setting Up Consolidation in Microsoft Dynamics:

    Once your subsidiary and parent company are both set up in Dynamics, you can prepare for consolidated financial reporting:

    • Create a Consolidation Company:

      • You can create a separate company within Dynamics specifically for consolidated financial reporting. This is often called a consolidation company.
      • Go to General ledger > Setup > Ledger > Consolidation and set up the consolidation company.

    • Configure the Consolidation Process:

      • Go to General ledger > Periodic > Consolidate > Consolidation.
      • Define the source companies (the parent and the subsidiary).
      • Choose the method of consolidation (such as by equity or by line-item).
      • Set up the consolidation currency, if different.
      • Map the chart of accounts between the parent and subsidiary to ensure proper alignment.

    • Eliminate Intercompany Balances:

      • In the consolidation setup, ensure you eliminate intercompany payables/receivables and other balances that occur between the companies.

    4. Generate Consolidated Financial Reports:

    Once everything is set up:

    • Go to General ledger > Inquiries and reports > Financial statements to generate consolidated financial statements.

      • You can create balance sheets, income statements, and other reports based on the consolidated financial data.
      • Dynamics will pull the financial data from both the parent company and the subsidiary, and automatically apply consolidation rules, including intercompany eliminations.

    • Use Financial Reporting Tools:

      • Microsoft Dynamics 365 includes built-in financial reporting tools like Financial Reporter (also known as Management Reporter) to design and generate consolidated reports.
  • Suggested answer
    Valentin Castravet Profile Picture
    Valentin Castravet 25,025 Super User 2024 Season 2 on at
    Consolidation
    In your parent company you set up business units. Each business unit is tied to a subsidiary company. That's where you do the set up. You don't do the set up in the subsidiary company. 
     
  • Suggested answer
    Jun Wang Profile Picture
    Jun Wang 7,440 Super User 2024 Season 2 on at
    Consolidation
    hope this could help
     
     
  • gdrenteria Profile Picture
    gdrenteria 12,929 Most Valuable Professional on at
    Consolidation

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