Consolidation Setup

GoldFinch supports multi-level financial consolidation for organizations with multiple legal entities operating in different base currencies.

The example below illustrates a US holding company (USD) with three wholly owned subsidiaries:

• US Subsidiary – Base Currency: USD
• Canada Subsidiary – Base Currency: CAD
• Europe Subsidiary – Base Currency: EUR

The parent company reports consolidated financial statements in USD.

GL Ledger Setup

Create the following GL Ledgers for consolidation.

Elimination Ledger

Create an Elimination GL Ledger for each consolidation level.

Requirements:

• The ledger type must be Elimination.
• The base currency must match the parent company's reporting currency.
• All intercompany elimination entries are posted to this ledger.

Example

Converted Ledgers

A Converted GL Ledger is required whenever a subsidiary's base currency differs from the parent company's reporting currency.

These ledgers store translated balances and are used during consolidation.

Examples

Source Ledger	Converted Ledger	Currency Conversion
Actual-CA	Actual-CA (USD)	CAD → USD
Actual-Euro	Actual-Euro (USD)	EUR → USD

 

GL Ledger Hierarchy

Click the Consolidated GL Ledger, then configure the GL Ledger Hierarchy.

This hierarchy defines the relationship between the consolidated ledger and its subsidiary ledgers. Without it, you will not be able to perform month-end consolidation processes, including:

• Calculating Currency Adjustments
• Processing month-end consolidations
• Generating consolidated financial statements and other consolidation-related transactions

Be sure to complete the GL Ledger Hierarchy setup before performing any month-end consolidation activities.

GL Accounts

To simplify month-end reconciliation, create dedicated Due To and Due From GL Accounts for each subsidiary.

Using separate accounts for each intercompany relationship makes it easier to:

• Reconcile intercompany balances
• Identify outstanding transactions
• Perform elimination entries
• Troubleshoot discrepancies

GL Account Fields

Recommended Consolidation Rate Types

Intercompany Customers and Vendors

Each subsidiary should have dedicated customer and vendor records for every other subsidiary it transacts with.

These records ensure that intercompany sales and purchases are automatically posted to the correct Due To and Due From accounts.

Account Fields

Field	Description
Is Intercompany	Must be selected to enable intercompany processing.
Default Receivable GL Account	Required. Specifies the subsidiary's Due To/Due From receivable account.
Default Payable GL Account	Required. Specifies the subsidiary's Due To/Due From payable account.
Default Revenue GL Account	Optional. If specified, intercompany sales invoices post revenue to this account instead of the Revenue account from Account Posting Setup.
Default COGS GL Account	Optional. If specified, intercompany sales invoices post Cost of Goods Sold to this account instead of the COGS account from Account Posting Setup.

Company Setup

Cumulative Translation Adjustment Account

The Cumulative Translation Adjustment (CTA) Account records translation differences created when converting a subsidiary's financial statements from its local currency into the parent company's reporting currency.

These differences arise from exchange rate fluctuations between reporting periods and are automatically posted during the currency translation process.

Configure the Cumulative Translation Adjust Account in Company Setup before performing currency translation and consolidation.