Setting up a Consolidation Entity in Microsoft Dynamics AX 2012

Posted on: August 14, 2015 | By: Jarrod Kraemer | Microsoft Dynamics AX/365

Many of our customers have complex legal and financial organization structures.  We most often see companies that have multiple legal entities operating under one parent company.  In Microsoft Dynamics AX 2012, it is important to set up a legal entity as a consolidation company in order to have a wholesome view of your financial statements, and thus your financial health as a company.  The consolidation company gathers financial transactions from all other legal entities into one combined entity.  It is important to note that you cannot post any financial transactions in your entity that is being used as a consolidation company.  Below we will show the basic set up for your consolidation company.

Firstly, go to Organization administration> Setup> Organization> Legal entities.  Click New and fill out of the information for your consolidation company.  Once it is created, check the box ‘Use for financial consolidation process’.  Fill out any necessary information as you see fit.  This information will appear on the financial statements.

 

Next, find your newly created consolidation legal entity and go to the address: General Ledger> Setup> Ledger.  (Note: You may need to close down AX and open it back up again to refresh the data in order to find the new legal entity).  At a minimum, fill in the fields: chart of accounts, fiscal calendar, accounting currency, and default exchange rate type.

After that, go to the address General Ledger> Setup> Currency> Currency Exchange Rate Types.  Set up the currency exchange rate type for the necessary periods in relation to your subsidiary entities.

If you have any subsidiaries with foreign currencies, please follow the steps below.  If not, go to the number sequence step.

Travel to the address General Ledger> Setup> Posting> Accounts for automatic transactions.  The ‘Profit and loss account for consolidation differences’ is for subsidiary companies in which the parent is actively relied upon.  If the company operates financially independent of the parent company then choose ‘Balance account for consolidation differences’.  In the main account field, select the account for the currency adjustments.

The final step is to generate number sequences.  In your consolidation entity, travel to Organization Administration>Common>Number Sequences>Number Sequences.  In the top left hand corner, click Generate and then follow the steps of the wizard to populate the number sequences for this legal entity.

Congratulations!  You have completed the minimum set up for a consolidation company.  We hope this has been another opportunity for you to increase your knowledge of Microsoft Dynamics AX 2012 and to better maximize its’ functionality to greater extents!

For additional information please feel free to reach out to us at info@loganconsulting.com or (312) 345-8817. 

All the best! 
Logan Consulting 
www.loganconsulting.com



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