Performing Consolidations with respect to any of
the below methods/scenarios/cases
|
Consolidation
Method
|
Multiple
Ledgers
|
Single
Ledger
|
Data
Transfer -complex financials, multiple ERP’s or instances
|
|
Case
|
-Addition of new company as a Subsidiary ledger
in case of a new company
-COA
structure, Calendar and currency are same across ledgers
|
Addition of a
new company as legal entity within the same ledger
|
Addition of legal entity/entities or ledger/ledgers
in case of new company/companies and uses consolidation tool.
|
|
Pain
Areas
|
-Addition of
a ledger
-Defining and
maintaining the mappings and mapping sets
-Consolidation
definitions etc.
|
-Addition of a
legal entity
-Defining and
maintaining the lookups
-Defining and
maintaining the mappings.
|
Configurations
on the tool for required integrations
|
|
Approach
|
Oracle's
Global Consolidation System (GCS)
|
Financial
Statement Generator (FSG) or BI Reporting
|
Oracle's
Hyperion Tool
|
1.
Consolidation Method: Global
Consolidation System
Case 1 – Considering
new company as a new
subsidiary ledger.
Assuming operations majorly in United States and
having one parent ledger with USD currency and whenever a new company is added client
considers that as a new subsidiary ledger since the COA structure and currency is
the same and in sync with the parent ledger.
Below are the steps of consolidation via GCS
Process:
·
Define ledger.
·
Prepare subsidiary data.
·
Create Consolidation and Chart of
Accounts Mapping– Subsidiary to parent COA structure mapping.
·
Translation - If any foreign currency
ledger or company, then you need to run translation to bring all the journals
in your parent ledger currency.
·
Transfer the data – Run the
Consolidation Data Transfer program to transfer balances or transactions from
your subsidiaries to the parent ledger.
·
Import - Each transfer creates a
consolidation journal in the parent ledger.
·
Elimination - Elimination intercompany
balances
·
Posting - Post journals
·
Trial Balance - Run TB
·
Reporting - Financial reports from
the consolidated ledger
·
Analyze - Use full drilldown
capabilities to drill from consolidated balances down to subsidiary journal
lines and subledger detail.
Benefits:
·
View the status of your consolidation
and monitor subsidiary account balances for any changes that occur after the
subsidiary data has been transferred.
·
Global consolidation system uses the
same master files and bases on the same data model as GL, therefore there is no
need for integration (e.g., Chart of Accounts, currency rates)
·
Global consolidation system would
allow you to drill down to source documents – if you transfer transactions (not
balances) to your consolidated set of books.
2.
Consolidation Method – Financial
Statement Generator or BI Reporting:
Case 2– Considering
new company as a new legal entity or balancing segment value.
Assuming that operations majorly in United States and
having one parent ledger with USD currency and whenever a new company is added client
considers that as a new legal entity with their COA structure and currency same
and in sync with the parent ledger.
Below are the steps for doing consolidation via BI
reporting Process:
·
Creating a new legal entity/new
company under the parent ledger.
·
Lookup to be configured in Oracle EBS
for legal entities mapping, map all Legal entity to one consolidated value in
the lookup.
·
Create another lookup for
intercompany elimination entries and map all the Legal entity to one elimination
value in lookup.
·
The intercompany elimination entries
will be reversed in the consolidate ledger.
·
Create a custom report for
consolidation of all balances under one consolidated legal entity.
Below are the steps for doing consolidation via
FSG Process:
·
Creating a new legal entity/new
company under the parent ledger.
·
Creation of row sets, column sets in
FSG.
·
Mappings to be maintained under row
set and column set for company, accounts etc.
·
Create a custom report for
consolidation of all balances.
Benefits:
·
No need to run additional processes
to consolidate unless ledgers have a different currency than the consolidation
currency.
·
View the consolidated balances
anytime. This cannot be done in the Balance Transfer Consolidation method
because that method requires a balance transfer be done to achieve
consolidation.
·
Faster close process.
3.
Consolidation Method - Hyperion:
Case 3 – Considering
the new company as either a subsidiary ledger or a legal entity under the
parent ledger.
Assuming that client is operating majorly in United
States and having one parent ledger with USD currency and whenever a new
company is added client considers that as either as a subsidiary ledger or a
new legal entity with the COA structure and currency same and in sync with the
parent ledger.
Below are the steps for doing consolidation via
Hyperion tool:
·
Connecting Oracle EBS general ledger
module to Hyperion data base via FDM (Financial Data Quality Management) /ODI (Oracle
Data Integrator).
·
Creating dimensions for capturing the
data
·
Collecting and loading the data
·
Calculating and adjusting the data
·
Consolidating the data
·
Locking and publishing the data
Benefits:
1) HFM is better than GCS in terms of tracking
history of consolidation parameters, like entities and mappings that were used
for consolidation purposes in the past
2) HFM is more visual, consequently it is easier to
maintain, as you adapt your consolidation parameters to ever-changing needs
3) HFM shares
the data model with Hyperion Planning, which could be a tangible benefit if you
plan on using HP for financial planning and modelling
