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Consolidated accounts can be produced for groups that consist of a parent company and one or more subsidiary companies. Consolidation of more complicated group structures, for example, those featuring associated companies and joint ventures will only be possible in future releases.
The parent company and its subsidiaries should be set up as clients in Accounts Production in the normal way before attempting consolidation. All group undertakings (parent and subsidiaries) must be set up as limited companies and must be based on enhanced charts of accounts, for example, ELTD.
Any group undertakings that are currently based on non-enhanced charts, for example, IRIS Solution Original must be converted to enhanced charts using the chart conversion procedure, before consolidation.
Please see Enhanced Chart Conversion Quick Guide for more help on the conversion procedure.
It is also recommended that all undertakings within the same group are based on the same chart of accounts although this is not compulsory.
Click the links below to jump to a particular section:
Step 1 - Creating
a Group Client
Step 2 - Posting
Consolidation Adjustments
Step 3 - Running Reports
To create a group client within the IRIS database:
From the Client menu select New Group.
Enter an (unique) identifier and description for the group.
Select Add | Add Parent and enter or select the identifier of the business that is the parent undertaking and click OK.
The group client must be based on an enhanced chart of accounts; standard charts such as IRIS Solution Original cannot be used.
The parent undertaking must be a limited company based on one of the enhanced charts of accounts.
Enter
the dates that define the undertaking’s membership of the group, or
leave the date fields blank if the undertaking has always been part
of the group. Leave the Consolidate
option selected to ensure the subsidiary is included in the group
accounts and click OK.
All group undertakings must be limited companies based on one of the enhanced charts of accounts.
Select the enhanced chart of accounts that you wish to use for the group, for example, ELTD.
The group client has now been created and its current structure will be displayed in a window.
Further adjustments to the group’s structure can now be made by adding, removing or editing undertakings, clicking OK when finished.
The percentage owned by the parent can be entered, however this does not affect the figures produced within Accounts Production. A report can be produced to show the relationship between all the undertakings.
It is possible to select a sub group of a group. If group is owned by another group the parent can be selected and all the subsidiaries will be included as part of the top level group automatically.
There is an option to choose to consolidate the subsidiary, by default this will be selected. If a subsidiary shouldn’t be included in the group accounts this box should be de-selected. If the subsidiary is on a standard chart, for example, IRIS this box is unavailable as Accounts Production can not consolidate companies on this chart.
Consolidation adjustments should be posted into the group’s post file.
Consolidated accounts cannot be produced until a group post file has been created.
To post the group’s consolidation adjustments:
Select the group client then select Posting | Post
Enter a description, account
period end date and previous account period end date for the group’s
posting entry.
The account period end dates for the group client would normally correspond with the account period end dates for the group undertakings, although this is not compulsory.
Clicking OK brings up the Specify Consolidation Posting Batch screen.
There are no fields for document types or double entry accounts because consolidation adjustments are all posted as single-sided journals.
Click OK to display the Consolidation Posting screen.
In addition to
an amount and account number, each posting requires the identifier
of the undertaking to which it relates. Clicking the Undertaking
magnifying glass will display a list of group undertakings which can
be selected. The Attr. Group
option should be used for postings attributable to the group rather
than to any particular undertaking.
Whilst the Undertaking field is compulsory, its only purpose is to preserve the audit trail.
When all the consolidation
adjustments have been posted and the Overall balance field reads zero,
click Close.
There must be a group posting entry for each of the current, comparative and pre-comparative years (where they exist), that is, consolidation adjustments are required for 3 years.
The consolidated accounts can be generated by selecting Reports | Annual and running the LTD report. IRIS will then consolidate the posting entries for all group undertakings, modify them by the group’s consolidation adjustments and produce the consolidated figures. The group’s data screens should also be completed to provide any additional information required for group disclosures.
Where the account period end in one of the subsidiaries differs from the period end in the group, a message will appear saying 'Some account periods do not match for X Limited (being the name of the company which does not match) Do you require notification?. If Yes is clicked, another message displays showing the dates which differ. Click OK to run the report.
TBL Three year trial balance for Group or Parent company.
TBG Three year trial balance showing Group and Parent together.