Category: Consolidation
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Foreign Currency in Consolidation: Best Practices for Eliminating FX Noise
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Introduction For multinational groups, foreign currency is more than just an accounting technicality — it’s one of the biggest sources of complexity in consolidation. Exchange rate fluctuations can create FX “noise” in the consolidated financials: artificial gains, losses, and mismatches that don’t reflect the underlying business performance. Without careful handling, FX noise can distort revenue,…
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Intercompany Reconciliations: How to Streamline the Most Time-Consuming Step in Consolidation
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Introduction If you ask any group finance team what slows down the consolidation process the most, the answer is almost always the same: intercompany reconciliations. Each entity records transactions with its group counterparts — loans, sales, charges, dividends — but by the time month-end or year-end rolls around, the numbers often don’t line up. What…
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Intercompany Loans and Interest: How to Eliminate Them in Consolidation
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Introduction Intercompany loans are a common financing tool within corporate groups. A parent may lend funds to a subsidiary, or two subsidiaries may arrange a loan between themselves. On the surface, these transactions provide flexibility in managing liquidity across the group. But when it comes to preparing consolidated financial statements, these loans — along with…
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Mastering Intercompany Dividend Elimination: A Comprehensive Guide for CFOs and Finance Teams
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Introduction Dividends are among the most common intercompany transactions in group structures. They are also one of the trickiest to manage in consolidation. While dividends represent cash returns to shareholders at the subsidiary level, they do not represent new income or external inflows at the consolidated group level. If not handled properly, intercompany dividends can…
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A Step-by-Step Guide to Building a Consolidated Cash Flow Statement
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Introduction Cash is the lifeblood of any business—and for groups with multiple subsidiaries, knowing where cash comes from and where it goes is critical. A consolidated cash flow statement (CFS) provides this big-picture view across the entire group. But building one isn’t as simple as stacking together each subsidiary’s statement. In fact, relying only on…
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Intercompany Transactions Elimination: Step-by-Step Accounting Process
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In group accounting, one of the biggest challenges is ensuring that financial statements present an accurate and fair picture of the business as a whole. This means more than simply consolidating numbers from multiple entities—it also requires eliminating intercompany transactions. If left unadjusted, intercompany activities can inflate revenue, expenses, assets, and liabilities, leading to misleading…
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The Complete Guide to Intercompany Eliminations in Consolidation
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When companies grow into multiple entities, transactions between those entities become inevitable. But when it comes time to prepare consolidated financial statements, these intercompany balances can distort the true financial picture. That’s where intercompany eliminations come in. In this guide, we’ll walk through what intercompany eliminations are, the challenges finance teams face, the different types…
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Consolidation vs Aggregation – What’s the Difference (and Why It Matters)
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When it comes to financial reporting across multiple companies, the terms “consolidation” and “aggregation” are often used interchangeably—but they are not the same thing. Understanding the difference is essential for any finance leader managing a group of entities. What Is Aggregation? Aggregation simply means combining data by stacking it together. If you have three subsidiaries…
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The Role of a Common Chart of Accounts in Group Consolidation
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When managing a group of companies, especially across different countries or business lines, one of the most critical challenges in financial consolidation is chart of accounts (COA) inconsistency. Each subsidiary may have its own naming conventions, account structures, and classifications—making group-level reporting a nightmare. That’s where the Common Chart of Accounts (CCOA) comes in. It’s…
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How Do I Run Consolidated Group Financial Statements in MYOB?
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Introduction: The Challenge of Consolidation for MYOB Users MYOB is a trusted accounting platform for thousands of businesses across Australia and New Zealand. It’s known for its local tax compliance, payroll tools, and general accounting features. However, as your business expands into multiple entities—whether due to geographic spread, structural complexity, or group ownership—you’ll likely encounter…