Dynamics Community Forum Thread Details

Consolidation

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.

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.

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.

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.

Quick Links

Leaderboard > Small and medium business | Business Central, NAV, RMS

Consolidation