When your sign-in belongs to two or more companies and one of them is the parent of a group (Chapter 22, Group), the Reports rail gains a Group (Consolidated) section, opened from the parent company:
- Consolidated Balance Sheet — the group's assets, liabilities and equity as of a date.
- Consolidated Profit & Loss — income and expenses over a period, with gross, operating and net profit.
- Consolidated Cash Flow — operating, investing and financing cash of every company (indirect method) at the period's average rate, the net change, the effect of exchange rate changes on cash, and cash at the beginning (at the rate the day before the period) and end (closing rate). Payments between the companies cancel within the same lines; confirmed eliminations change net profit and are reversed as a non-cash adjustment.
- Consolidated Trial Balance — every group account's balance, total debits equal to total credits.
- Consolidated Receivables Aging and Consolidated Payables Aging — what customers owe every company of the group (or what each owes its vendors) by days past due, company by company, in one currency. Balances between the group's own companies are left out unless you tick Include balances between the group's companies — they cancel on consolidation.
- Group Eliminations — each period's eliminations (see below).
- Intercompany Reconciliation — every invoice, bill, credit note, vendor credit, order, journal and shipment with an internal customer or vendor in the period, beside the draft it produced in the other company. Status tags count each kind: Matched (both published, same amount, currency and date), Draft not published, Mirror failed (with the reason and a Retry), Source cancelled (the source was taken back after its mirror was made — delete or reverse the mirror), Shipped, not received, Received, No mirror, Mirror deleted and Difference (amount, currency or date). Document numbers open the document in its company.
Each report has one column per company, an Eliminations column and the Group total, all in the group's presentation currency — or any other currency chosen under Show in in the report settings (the note under the title says which). Rows are the parent company's chart of accounts: each company's accounts roll up into it as set on the mapping screen.
Currency translation. A company that keeps its books in another currency is translated the way accounting standards (IAS 21) require:
- assets and liabilities at the closing rate on the report date;
- income and expenses at the period's average rate (the average of the month-end rates);
- equity at the rate on the date the company was acquired (set on the group, else its first posting);
- profits of earlier years at each year's average rate.
What that leaves over is the Translation reserve line under equity. It is zero for a company already in the group's currency. The parent's fiscal year decides what Current year profit means on the balance sheet.
Drilling down. A company's figure is a link when you can open that company: it switches to the company and opens its General Ledger for the accounts behind the figure.
Eliminations. On Group Eliminations, pick a period and click Propose. LedgersLab reverses, in the group's currency:
- what the companies owe each other at the period end — each company's receivable from the customer standing for another company and payable to the vendor standing for one (closing rate);
- their sales to and purchases from each other in the period — the income and cost of intercompany invoices, bills and journals published on both sides (average rate);
- the parent's investment in each company whose investment account is set (Chapter 22, Group) against that company's equity at acquisition (acquisition-date rate). The outside owners' share of that equity is Non-controlling interest at acquisition; what the parent paid above its own share is Goodwill (below it, a Gain on bargain purchase);
- unrealised profit in stock — when a company still holds goods it bought from another group company at the period end, the seller's margin on them (its selling price less its cost, per unit) for the quantity still held, at most what it bought from the group. It comes off the buyer's inventory and is added to cost of sales.
Tax between the companies stays (it is still owed). Anything that does not cancel — tax, exchange or booking differences — is one Difference line, so the set always balances. Add a line by hand where needed (an adjustment your auditor asks for, say): choose the group account, enter the amount (debit positive, credit negative) and a description; Remove takes it out again. Confirm and close the period puts the eliminations into the Eliminations column of the consolidated reports and closes the group period: it cannot be proposed again until you Reopen it (only the latest confirmed period can be reopened). No company's own books change.
Non-controlling interests. When the group owns less than 100% of a company, the consolidated balance sheet ends with Equity attributable to owners of the parent and … to non-controlling interests, and the P&L with the same split of net profit — the outside share of each company's result.