Several companies, one group report
The whole group as one company, each entity one click away, converted to the group currency month by month, with intercompany taken out.
Meridian is a fictional demo company. All figures are sample data.
Key questions
How is the group doing as a whole?
The group's P&L, balance sheet, working capital and cash flow add up every entity, converted to the group currency.
How much does each entity contribute?
Revenue by entity is shown year by year, and each entity's own report opens with one click, in its own currency.
Does intercompany net out?
Intercompany revenue and costs are eliminated every month, and balances between the entities are reconciled pair by pair.
Several companies, one report
The group report shows the whole group as one company, and one click on an entity opens that entity’s own report. Figures are converted to the group currency at monthly rates, and the entity reports stay in their own. Intercompany revenue and costs are eliminated every month; where a balance does not net, the report names the missing account and how to book it.
Platform
- Multi-Entity, Multi-Currency: Consolidation with intercompany elimination: every entity in one group report, converted to the group currency at monthly rates.
One report per entity, one for the group
Each entity has its own trial balance, account mapping and report, in its own currency. The group report is built from the entity results after them. A button per entity and one for the group sit in the header of every report, so a reader moves from the group to an entity and back in one click.
Every entity maps into the same standard chart, whatever its accounting system or country, so the group's lines add up line by line. An entity outside the deal perimeter, or one whose data is not ready, can be excluded. It then leaves the group report and every entity switcher until it is included again.
Currency conversion at monthly rates
An entity in another currency is converted to the group currency month by month, at the rate stored for that month. The rates are entered in the operator app, which shows for each currency how many months still lack one. A month without a rate converts at the entity's fallback rate. The rates used are listed under the statements.
A balance that is really a group-currency amount, such as an intercompany loan agreed in euros, can be held at that amount, and the balance sheet total stays the same.
Wherever an intercompany amount is converted, the entity's own figure and the rate stand beside it, so it can be checked against that entity's books.
Intercompany elimination, every month
An intercompany charge is one invoice booked twice: revenue in the entity that raised it and cost in the entity that received it. Every section of the profit and loss statement can carry an intercompany line, and the group P&L shows each with an IC badge and an elimination line beneath it.
The IC Elimination tab of the Transaction view checks every month that what one entity billed inside the group, another booked as cost, and shows where the two differ.
Intercompany balances, reconciled
Balances between the entities are reconciled in the IC Reconciliation tab: the intercompany accounts each entity holds, the loans between them, who owes whom and what does not net, with the bookings that correct it.
Corrections are made in the books and the report rebuilt, so the residual on the page is always the one the books show. Intercompany balances are eliminated before net debt in the bridge from enterprise value to equity value.
In the group's Commercial view, invoices to sister companies are taken out of client revenue and stated separately.
Terms
- Entity
- One legal company in the group: one set of books, one currency, one trial balance.
- Group Currency
- The currency the group report is stated in.
- Intercompany (IC)
- Transactions and balances between companies of the same group.
- Elimination
- Taking intercompany revenue and costs out of the group figures, so the group shows only business with third parties.
- Fallback Rate
- An entity's standing rate, used for a month with no rate entered.
Data sources
- The monthly trial balance and the account mapping of each entity
- The entity register: each entity's currency, and whether it is in the group
- Monthly exchange rates for each currency other than the group's
- The open items lists of each entity, for who owes whom inside the group
FAQ
What is intercompany elimination?
Removing what group companies charge each other from the group's revenue and costs. One entity's revenue is another's cost, so both come out, and the group shows only its business with third parties.
Which exchange rates are used?
The rates entered for each month, one per currency, such as the central bank's month-end rate. Each month converts at its own rate, and the report lists the rates it used.
Can an entity be left out of the group?
Yes. An excluded entity leaves the group report and the entity buttons. Its data and mapping stay in place, and including it again brings it back at the next build.
What if intercompany balances do not match?
The IC Reconciliation tab names the accounts to open and the bookings to make, and states the residual. Once the books are corrected and the report rebuilt, the residual reflects them.
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