Chapter 8: Consolidations: Objectives

Chapter 8: Consolidations
CHAPTER 8: CONSOLIDATIONS
Objectives
The objectives are:
• Set up a consolidation company.

• Set up a subsidiary company.
• Perform a consolidation.
• View the consolidations inquiry.
• View and delete consolidation transactions.
• Describe intercompany eliminations.
Introduction
This course demonstrates the functionality and flexibility of Microsoft Dynamics
AX® in consolidating subsidiary companies into a single consolidated (parent)
company.
Some key features include the ability to:
• Consolidate companies whether they reside in the same database or

in different databases.
• Map the Chart of Accounts and dimensions in a subsidiary to the
consolidated company.
• Specify how the exchange rate should calculate for the consolidation.
• Designate the percentage of ownership that should roll into the
consolidated company from the subsidiary.
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Financials II in Microsoft Dynamics® AX 2012
Set Up a Consolidation Company

In Microsoft Dynamics AX, a consolidation (parent) company is set up to
accumulate the activity from the subsidiaries. Follow these steps to set up the
consolidation company:
1. Set up General ledger parameters

2. Set up a system account
3. Set up currency and exchange rates
4. Set up the Chart of Accounts
Overview
In a consolidation, it is possible to gather transactions from several company
accounts into a single set of company accounts. It is possible to print reports,
such as financial statements, from the consolidated company, but it is not
possible to use this company for daily transactions.
It is possible to consolidate data from companies with databases that are external
to the consolidated company database, or consolidate data from companies in the
same database, a so-called "online" consolidation.
General Considerations
Consolidations do not necessarily require that you set up the consolidated
company in advance. But if you want to use the consolidation conversion
principles to convert subsidiary data in foreign currencies, you must set up the
consolidated company main accounts.
Procedure: Set Up Company Information and Accounts

To prepare a consolidated company (the company that collects the results and
balances of the subsidiaries) for a consolidation, perform at minimum the
following steps:
1. Click Organization administration, click Setup, click

Organization, and click Legal entities.
2. Click the New button to create a new company to serve as the
consolidation company.
3. Click the Use for financial consolidation process check box to
define that this legal entity’s ledger combines the financial data of
subsidiary legal entities. Enter information about the consolidated
company as you want it to appear on financial statements about the
4. Click General ledger, click Setup, click Currency, and then click
Currencies. Create the default currency of the consolidation
company.
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5. Click General ledger, click Setup, and then click Ledger. Select the
company currency of the consolidated company.
6. Click General ledger, click Setup, click Chart of accounts, and
then click Chart of accounts. Set up the main accounts of the
consolidated company, if appropriate.
FIGURE 8.1 LEGAL ENTITIES
Foreign Currency Consideration

If some subsidiaries have foreign currencies as their company currencies, click
General ledger, click Setup, click Currency, and then click Currencies. and
then create the foreign currencies.
Set up exchange rates in relevant periods for the subsidiary company currencies.
If you create the consolidated company early in the period, you can adjust the
period exchange rates as the exchange rates change during the consolidation
period.
Procedure: Set Up Automatic Posting

Follow these steps to set up a system account to automatically post differences
that result from consolidating subsidiaries with foreign currencies.
1. Click General ledger, click Setup, click Posting, and then click
Accounts for automatic transactions.
2. Click the New button to add a line.
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3. In the Posting type field use the arrow to select one of the following:
o Balance account for consolidation differences if you are
consolidating an integrated foreign subsidiary.
o Profit & loss account for consolidation differences if you are
consolidating a self-sustaining subsidiary or a company that
contains the results of several self-sustaining subsidiaries and are
using translation methods to consolidate the data.
4. Use the Ledger account arrow to select the appropriate account.
FIGURE 8.2 ACCOUNTS FOR AUTOMATIC TRANSACTION
Set Up a Main Account and Consolidation Account

Relationship
Use a main account and associate a consolidated legal entity account for
transactions. This account is used when transactions or balances of the selected
main account are added during consolidation. To set the consolidated account
relationship, click General ledger, click Setup, click Main Accounts, and then
enter an account in the Consolidation account field.
8-4
Lab 8.1 - Set Up a Consolidation Company

During this lab you will set up consolidation company information
Scenario
Contoso is expanding and has acquired an additional company. To include the

activity from both Contoso Entertainment USA (CEU) and the newly acquired
subsidiary of Contoso Entertainment Europe (CEE), a new company called
Contoso Entertainment Systems (CEC) has been created.
Sara, the Chief Financial Officer, sends Ken, the Controller, an e-mail with the
following information to continue with the setup of CEC.
• Any differences from the consolidation should post to profit and loss
account 618160.
• The consolidation rate should use today's date and a rate of 149.25
• The consolidated company will use U.S. dollars (USD) as the default
currency, and the newly acquired subsidiary uses euros (EUR) as
their currency.
Challenge Yourself!
Help Ken complete Sara's request.
Need a Little Help?
• Review the organization information for the consolidation company.

• Designate the main account in the consolidation company.
• Set up the consolidation exchange rate in the consolidation company.
• Designate that account 618160 will be used for consolidation
purposes.
Step by Step
Follow these steps to review the general ledger parameter.
1. Verify that you are in the CEC company. If not, change to the CEC
company.
2. Click Organization Administration, click Setup, click
3. Ensure that the Use for financial consolidation process check box
is selected.
4. Close the form.
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Follow these steps to designate the system account.
Accounts for automatic transactions.
2. Click the New button to add a line.
3. Click the Posting Type arrow, and then click Profit and loss
account for consolidation differences.
4. In the Main account field, click the arrow to select 618160.
5. Close the form.
Follow these steps to define the consolidation exchange rates.
1. Click General ledger, click Setup, select Currency, and then click
Currency exchange rates.
2. Use the drop down list and select CEC as the rate type.
3. Select the line for the EUR, Euro.
4. Click the Add button, click on the calendar, and then click the
Today button.
5. In the Exchange rate field, enter 149.25.
6. Close the form.
8-6
Set Up a Subsidiary Company

After you complete the setup process in the consolidated company, you can focus
on the subsidiary company. The amount of setup needed in a subsidiary depends
on how closely the Chart of Accounts and dimensions for the consolidated
company and subsidiary are aligned.
Use the Same Chart of Accounts as Consolidated Entity

If the subsidiary ledger accounts have the same account numbers and chart of
account structure as the consolidated company ledger accounts, you do not have
to manually map the subsidiary main accounts to consolidated company
accounts.
In the Consolidate Online form of the consolidated company, select the Use
consolidation account check box before consolidation. The transfer of
transactions and balances to the correct account occurs automatically during
consolidation.
If the account numbers do not correspond during the consolidation process, the
process will stop and the system generates an error message.
Blank Chart of Accounts

You can perform a consolidation without creating a consolidated company chart
of accounts in advance.
• If you have planned the structure that you want to use in the
consolidated company, you can map the subsidiary accounts to this
structure; when you perform the consolidation, the consolidated
accounts that you indicated in the Consolidation account field are
created automatically during consolidation.
• If you make no mappings on subsidiary accounts, the consolidated
company accounts are created automatically when subsidiary data is
transferred to the consolidated company. Subsequent data, for
example, from the second company being consolidated, is
accumulated in consolidated company accounts with the same
account number as the subsidiary account.
Regardless of whether you have done mapping or not, clear the Use
consolidation account: check box in the Consolidate form of the consolidated
company before running this type of consolidation.
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Mapping Subsidiary and Consolidated Chart of Accounts

If the subsidiary chart of accounts does not follow the chart of accounts of the
consolidated company, you can map the subsidiary accounts to the consolidated
company accounts.
1. In the subsidiary company, click General ledger, click Common,

and then click Main account.
2. Select each subsidiary ledger account that will be transferred to the
consolidated company. On the General FastTab, in the
Consolidation account field, enter the account in the consolidated
company to which the balance or transactions of the selected
subsidiary ledger account will be transferred. If the chart of accounts
in the consolidated company is simpler than the subsidiary account
structure, enter the same consolidated company ledger account on
several subsidiary accounts. To prepare reports and financial
statements that are based on dimensions in the consolidated
company, map the dimensions that are used in subsidiary accounts to
consolidated company dimensions.
NOTE: If the Account types of the subsidiary accounts that are transferring
differ from the consolidated company, the values of transaction accounts
override the values of total and parent accounts during consolidation.
Dimensions
If you are planning to prepare reports and financial statements using dimensions
in the consolidated company, map the dimensions used in the subsidiary to the
consolidated company dimensions.
During consolidation, balances and transactions transfer from the subsidiary

company to the consolidated company, according to assigned dimensions. For
this transfer to occur, you must select the value Group dimensions in the
Specifications field on the Financial dimensions tab in the Consolidation,
Export, and Consolidation, Online forms, in which subsidiary accounts are
added to the consolidated company.
To simplify the dimension structure of the consolidated company, the same

consolidated company dimension must be assigned to several subsidiary
dimensions.
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Procedure: Set Up Dimensions

Follow these steps to map a dimension in the subsidiary to the consolidated
company.
1. Click General ledger, click Financial dimensions, then Financial

dimensions.
2. Select a Dimension name, and then click the Financial dimension
button.
3. In the Group dimension field on the General FastTab, enter the
dimension.
Perform a Consolidation
Microsoft Dynamics AX supports the following options to perform
consolidations:
• From the same database using the online option

• From and, or to another database using the Import/Export option
NOTE: Before you perform a consolidation at the close of a period, ensure that
the period closing preparatory activities are performed, but do not close the
subsidiary accounts until the consolidation is completed.
Procedure: Consolidation, Online

An online consolidation is a consolidation where the subsidiary companies are
within the same database as the consolidated company.
If there are previous consolidation transactions for the company, date , and
account range, the transactions will be removed and consolidated again.
1. Click General ledger, click Periodic, click Consolidate, and then

click Consolidate [Online]. In the Consolidate [Online] form,
prepare the transfer of subsidiary data to the consolidated company.
2. Specify the details of the consolidation in the fields on the Criteria
tab. If the same criteria apply, you can transfer data from several
subsidiaries to the consolidated company in one operation.
3. Click the Financial dimensions tab and specify the dimension
information that is transferred from subsidiary account transactions
to the transactions in the consolidated company.
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4. Click the Legal Entities tab, and create a line for each subsidiary
company whose data are to be imported into the consolidated
company. On the line for each subsidiary:
o If the consolidate company owns part of a subsidiary, indicate
the share of the subsidiary accounts that is imported.
o If you are consolidating foreign currency subsidiaries, in the
Account type of conversion differences field, specify whether
consolidation exchange differences are posted to a Balance
account or to a Profit & loss account in the consolidated
company.
5. Click Batch to set up the consolidation to run as a batch job at the

time you prefer, or click OK to run the consolidation immediately.
The transactions and balances that were specified for consolidation
in the subsidiaries are added to the appropriate consolidated
company accounts.
FIGURE 8.3 CONSOLIDATE ONLINE FORM
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Procedure: Consolidation, Export

Follow these steps when the subsidiary company is in a different database than
the consolidated company, in which case the export option can be used to prepare
a comma-delimited file to import into the consolidated company.

click Consolidate [Export to].
2. On the Criteria tab, specify the details of the consolidation. If the
same criteria apply to several subsidiaries, you can transfer data from
the subsidiaries in the same database to separate export files in one
operation.
3. On the Dimensions tab, specify the dimension information that is
transferred from subsidiary account transactions to the transactions
in the consolidated company.
4. On the Legal Entities tab, create a line for each subsidiary company
whose accounts will be exported to files. These files will later be
imported into the consolidated company.
5. For each subsidiary, enter the subsidiary name and the name of the
export file that will be created during the export job.
6. Click Batch to set up the consolidation to run as a batch job at a
specific time, or click OK to run the consolidation immediately.
7. When the export is finished, you receive a message that lists the
number of records that were saved in each file. You can now import
the files into the consolidated company.
Procedure: Consolidation, Import

Follow these steps when the subsidiary is in another database and its data has
been exported to a comma-delimited file, so you can perform an import to bring
the subsidiary data into the consolidated company.

click Consolidate [Import from].
2. On the Criteria tab, specify the details of the data import.
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3. On the Legal Entities tab, create a line for each subsidiary company
whose data will be imported into the consolidated company. On the
line for each subsidiary:
o If the consolidate company owns part of a subsidiary, indicate
the share of the subsidiary accounts that is imported.
o In the Account type of conversion differences field, specify
whether consolidation exchange differences are posted to a
Balance account or to a Profit & Loss account in the
4. Click Batch to set up the consolidation to run as a batch job at a
specific time, or click OK to run the consolidation immediately.
The transactions and balances that were specified for consolidation in the
subsidiaries are added to the appropriate consolidated company accounts.
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Lab 8.2 - Perform a Consolidation

Scenario
Sara, the Chief Financial Officer has asked Ken, the Controller, to consolidate
the activity for Contoso Entertainment USA (CEU) from 01/01/2009 through
12/31/2011 into the Contoso Entertainment Consolidation (CEC) company. Sara
also has asked Ken to specifically review the balance of account 110110, Cash in
bank-U.S., to verify the accuracy of the consolidation.
Challenge Yourself!
Help Ken perform a consolidation of CEU.
Need a Little Help?
• Use the online option to consolidate the subsidiary.

• Select the Include actual amounts field on the Criteria tab to
perform the consolidation.
Step by Step
Follow these steps to review the general ledger parameter.
1. Verify that you are in the CEC company. If not, change to the CEC
company.
2. Click Organization Administration, click Setup, click
3. Ensure that the Use for financial consolidation process check box
is selected.
4. Close the form.
Select the CEC company.

click Consolidate [Online].
2. Enter 110110 as the main account in the From and To fields.
3. In the From period field, enter 01/01/2009.
4. In the To period field, enter 12/31/2011.
5. Click the Currency translation tab.
6. Click the New button to add a new record.
7. In the Source legal entity field, use the arrow to select CEU.
8. In the To and From account fields, select account 110110, Bank
Account - USD
9. Use Average in the Exchange rate type field.
10. Select Consolidation Date in the Exchange rate date field.
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11. Click the Description tab.

12. In the Description field, enter Initial Consolidation.
13. Click OK to process the consolidation.
14. Click General ledger, click Common, and then click Main
accounts.
15. Click on the Main account 110110
16. Click Balance.
17. Note the balance.
18. Switch to the CEU company and repeat steps 14 through 17. Notice
that the balance for the account in each company.
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Consolidations Inquiry
After performing a consolidation, it may be necessary to review the entries that
are created. Microsoft Dynamics AX has functionality to facilitate the review of
the consolidation entries.
To review, click General ledger, click Inquiries, and then click Consolidations.
FIGURE 8.4 CONSOLIDATIONS INQUIRY
The Overview tab provides a list of all the entries created through the
consolidation process. In addition to the information on the Overview tab, the
General tab displays the time that the entry was created and the user ID of the
person who created the entry.
The Transactions button has options of Actual or Budget. This enables the
display of the consolidation entries that are created.
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View and Delete Consolidation Transactions

There may be times when it is necessary to remove consolidation transactions.
For example, a data entry error might be made when a user sets up the
consolidation process. Microsoft Dynamics AX has functionality to simplify the
deletion of consolidation entries.
Procedure: Remove Consolidation Transactions

Follow these steps to remove consolidation transactions.
1. Click General ledger, click Inquiries, and then click

Consolidations.
2. Click the line for the transactions to remove.
3. Click Remove transactions. A confirmation form opens.
4. Click OK to delete the transactions.
Intercompany Eliminations
Elimination transactions are required when a parent company conducts business
with one or more subsidiary companies and uses consolidated financial reporting.
Some transactions that occur between the companies must be eliminated because
consolidated financial statements must only include transactions that occur
between the consolidated entity and the other entities outside the consolidated
group. Because of this requirement, transactions between a parent company and
its subsidiary companies must be removed or eliminated.
Predefined elimination rules create elimination transactions in a company

specified as the destination company for eliminations. You can generate the
elimination journals during the consolidations process or by using an elimination
journal proposal.
Scenario
Phyllis, the Accounting Manager, is responsible for the period and fiscal year
closing for Contoso and its subsidiary. During the fiscal year, Contoso paid the
payroll of its subsidiary. During the fiscal year closing, Phyllis must eliminate the
amounts in the associated payroll accounts.
8-16
Types of Companies
Refer to the following table for descriptions of the types of companies that are
associated with intercompany eliminations.
Term Description
Consolidation A company created to report financial results for a
Company group of companies. The financial data from the
companies is consolidated into this company, and
then a financial report is created by using the
combined data.
Elimination Company An elimination journal is valid only in companies
that are designated as elimination companies.
A company can be both an elimination company
and a consolidation company.
Source Company The company in which the amounts to eliminate
reside.
Destination Company The company in which the elimination journal is
created and posted.
Procedure: Set Up a Company for Elimination

Transactions
Follow these steps to allow elimination transactions to be created in the ledger of
the legal entity.
1. Click Organization administration, click Setup, click

Organization, and then click Legal entities.
2. Mark the Use for financial elimination process box.
Procedure: Create a Ledger Elimination Rule - Overview

Elimination rules are the setup portion of creating system-generated elimination
transactions, defining how to eliminate transactions between a parent company
and a subsidiary company. An elimination rule is stored based on each company
and must be unique.
NOTE: You can set up elimination rules in any company, but you can process
them only in an elimination company.
Follow these steps to create a ledger elimination rule.
Ledger elimination rule.
2. Click the New button to create a new rule.
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3. In the Rule field, enter a unique identification for the elimination

rule. This may default from the number sequence settings.
4. Enter a Description.
5. Select a Destination company, which is the company where the
elimination journal will be created.
The Elimination option must be selected in the Legal entities form
for the destination company.
NOTE: The currencies of the destination and source companies must be the
same.
6. Enter or select the beginning date as the Effective start date.

7. Enter or select the ending date as the Effective end date.
8. Select the Active check box to indicate whether the elimination rule
is available for processing.
9. In the Date last run field, view when the elimination rule last was
last processed successfully.
10. In the Journal settings section, select a journal Name with the type
of elimination.
FIGURE 8.5 LEDGER ELIMINATION RULE FORM
8-18
Procedure: Create a Ledger Elimination Rule - Lines

Follow these steps to enter additional information, such as the elimination
method, source and destination accounts, and dimension information, about the
elimination rule.
1. From the Ledger elimination rule form, click the Lines button.
2. Click the New button.
3. From the drop-down list, select an Elimination method.
o Net change: eliminates an account's net change for a specified
date range. This is the most common elimination method.
o Fixed amount: eliminates a specified amount for an account.
With this method, a manual process determines the fixed amount
to eliminate for an account.
FIGURE 8.6 LEDGER ELIMINATION RULE LINE FORM
Procedure: Create a Ledger Elimination Rule - Lines with

Net Change
If the selected Elimination method is Net change, follow these steps to
complete the ledger elimination rule line setup.
1. In the Source account field, enter the account that the amount will
be eliminated from. The source account is used together with the
optional source dimensions to calculate the amount to eliminate.
2. In the Destination account field, select from the drop-down list:
o Source: The respective account field will be disabled.
o User specified: Enter an account.
8-19
3. If you select User specified, enter an Account.

4. In the Destination dimension field, select from the drop-down list:
o Source: The respective dimension field will be disabled.
o User specified: Enter zero or one dimension codes for every
dimension.
5. Select the Source dimensions, if desired, that the amount will be

eliminated from.
6. In the Dimension fields, select dimensions that transactions will post
to for the elimination rule.
HINT: You can use wildcard characters in the source account and source
dimension fields.
Procedure: Create a Ledger Elimination Rule - Lines with

Fixed Amounts
If the selected elimination method is Fixed amount, follow these steps to
complete the ledger elimination rule line setup.
1. The Destination account displays User specified.

2. Select the Account that the transaction will post to. The destination
dimensions displays User specified.
3. Enter an Amount.
4. In the Dimension fields, select dimensions that transactions will
post to for the elimination rule.
Process an Elimination Rule

There are two methods to process a ledger elimination rule:
• The Elimination journal proposal creates a journal in the

elimination company.
• During the Consolidate Online process in a consolidation company,
a journal is created in the company, specified as the destination
company.
Procedure: Create an Elimination Journal Proposal

An Elimination Journal Proposal will create an elimination journal in the General
Ledger. The advantage of a journal is being able to preview and validate results.
This method of processing an elimination rule might be preferred if you first

must consolidate data, confirm the data in the consolidation company is accurate,
and then run a separate elimination journal proposal to create and approve the
elimination transactions.
8-20
Follow these steps to create an elimination journal proposal.
1. Click General Ledger, click Journals, and then click Elimination.

2. Press the New button to create a new journal.
3. Click the Lines button.
4. Click the Proposals button, and then click Elimination proposal.
5. In the Source company field, select the company to use to retrieve
the amounts for elimination.
6. Select the elimination Rule.
7. The Description of the elimination rule displays.
8. The date that the elimination last processed and distributions were
successfully created displays in the Date last run field.
9. Enter the beginning and ending dates by which ledger amounts will
be retrieved for elimination in the Period and To fields, respectively.
10. Enter the posting date of the elimination journal to the general ledger
in the GL posting date field.
11. Enter a release date in the Release date field to put the transaction
on hold until a specified date, enter that date. You still can modify
the transaction, and it can be posted on or after this date. If this field
is blank, the transaction can be posted at any time. This date can be
removed at any time.
12. Enter a Reason code if desired.
FIGURE 8.7 ELIMINATION PROPOSAL FORM
8-21
Procedure: Process an Elimination During Consolidation

You can process a ledger elimination rule during the consolidate online process.
The elimination rule runs against the consolidated company. You can run
elimination rules in a proposal mode to perform what-if analysis. You can then
navigate to journals to view the proposed results. If the results are as desired, you
then can post the elimination entries.
This method of processing an elimination rule is preferred if consolidations are

simple and the ease of a one-step process is desirable.
Follow these steps to process a ledger elimination rule during the consolidation
online process.

click Consolidation [Online].
2. On the Criteria tab, enter the Period from and Period to date range,
which determines the source data to eliminate.
3. Select the Elimination tab.
4. In the Proposal options field, select from the drop-down list.
o Proposal only: Journals are created.
o Post only: Journals are created and posted.
5. Enter the posting date of the elimination journal to the General

Ledger in the GL posting date field.
Summary
This section described the setting up and processing of a consolidation using
Microsoft Dynamics AX.
Users who decide to apply the information provided can set up their system for
consolidations.
8-22
Test Your Knowledge

Test your knowledge with the following questions.
1. Ken, the Controller at Contoso Entertainment USA (CEU), discusses the

Contoso Entertainment Consolidation (CEC) company with Sara, the Chief
Financial Officer. They agree that the same Chart of Accounts will be used in
the CEC as in CEU. Sara asks Ken whether a Chart of Accounts must be set
up for CEC before they consolidate CEU.
2. Give your opinion and an explanation about Sara's request.
3. What three types of consolidation processes are available in Microsoft

Dynamics AX? (Select all that apply)
( ) Offline
( ) Online
( ) Export
( ) Import
4. When is using an intercompany elimination necessary?
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5. What are two benefits of an elimination journal proposal? (Select all that
apply)
( ) An elimination journal proposal lets users preview results
( ) An elimination journal proposal posts automatically
( ) An elimination journal proposal lets users validate results
( ) An elimination journal proposal can only be run once
6. Should transactions other than the consolidation transactions be processed in

a consolidated company?
8-24
Quick Interaction: Lessons Learned

Take a moment and write down three key points you have learned from this
chapter
1.
2.
3.
8-25
Solutions
Test Your Knowledge
1. Ken, the Controller at Contoso Entertainment USA (CEU), discusses the
Contoso Entertainment Consolidation (CEC) company with Sara, the Chief
Financial Officer. They agree that the same Chart of Accounts will be used in
the CEC as in CEU. Sara asks Ken whether a Chart of Accounts must be set
up for CEC before they consolidate CEU.
2. Give your opinion and an explanation about Sara's request.
MODEL ANSWER:
A Chart of Accounts will not need to be set up in CEC because the accounts
can be created during the consolidation process. If the subsidiary, CEU, used
a default currency other than USD, the Chart of Accounts would need to be
set up because currency conversion cannot be performed (the Consolidation
account field cannot be selected).
3. What three types of consolidation processes are available in Microsoft

Dynamics AX? (Select all that apply)
( ) Offline
(√) Online
(√) Export
(√) Import
4. When is using an intercompany elimination necessary?
MODEL ANSWER:
Elimination transactions are required when a parent company conducts

business with one or more subsidiary companies and uses consolidated
financial reporting. Some transactions that occur between the companies
must be eliminated because consolidated financial statements must include
only transactions that occur between the consolidated entity and the other
entities outside the consolidated group. Because of this requirement,
transactions between a parent company and its subsidiary companies must be
removed or eliminated.
8-26
5. What are two benefits of an elimination journal proposal? (Select all that
apply)
(√) An elimination journal proposal lets users preview results
( ) An elimination journal proposal posts automatically
(√) An elimination journal proposal lets users validate results
( ) An elimination journal proposal can only be run once
6. Should transactions other than the consolidation transactions be processed in

a consolidated company?
MODEL ANSWER:
No, the only transactions in the consolidated company should be those

created by the consolidation process.
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Chapter 8: Consolidations: Objectives

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Chapter 8: Consolidations

• Set up a consolidation company.

Some key features include the ability to:

• Consolidate companies whether they reside in the same database or

Set Up a Consolidation Company

1. Set up General ledger parameters

Procedure: Set Up Company Information and Accounts

1. Click Organization administration, click Setup, click

FIGURE 8.1 LEGAL ENTITIES

Foreign Currency Consideration

Procedure: Set Up Automatic Posting

4. Use the Ledger account arrow to select the appropriate account.

FIGURE 8.2 ACCOUNTS FOR AUTOMATIC TRANSACTION

Set Up a Main Account and Consolidation Account

Lab 8.1 - Set Up a Consolidation Company

Contoso is expanding and has acquired an additional company. To include the

Need a Little Help?

• Review the organization information for the consolidation company.

Follow these steps to designate the system account.

Follow these steps to define the consolidation exchange rates.

Set Up a Subsidiary Company

Use the Same Chart of Accounts as Consolidated Entity

Blank Chart of Accounts

Mapping Subsidiary and Consolidated Chart of Accounts

1. In the subsidiary company, click General ledger, click Common,

During consolidation, balances and transactions transfer from the subsidiary

To simplify the dimension structure of the consolidated company, the same

Procedure: Set Up Dimensions

1. Click General ledger, click Financial dimensions, then Financial

• From the same database using the online option

Procedure: Consolidation, Online

1. Click General ledger, click Periodic, click Consolidate, and then

5. Click Batch to set up the consolidation to run as a batch job at the

FIGURE 8.3 CONSOLIDATE ONLINE FORM

Procedure: Consolidation, Export

1. Click General ledger, click Periodic, click Consolidate, and then

Procedure: Consolidation, Import

1. Click General ledger, click Periodic, click Consolidate, and then

Lab 8.2 - Perform a Consolidation

Need a Little Help?

• Use the online option to consolidate the subsidiary.

Select the CEC company.

1. Click General ledger, click Periodic, click Consolidate, and then

11. Click the Description tab.

FIGURE 8.4 CONSOLIDATIONS INQUIRY

View and Delete Consolidation Transactions

Procedure: Remove Consolidation Transactions

1. Click General ledger, click Inquiries, and then click

Predefined elimination rules create elimination transactions in a company

Procedure: Set Up a Company for Elimination

1. Click Organization administration, click Setup, click

Procedure: Create a Ledger Elimination Rule - Overview

Follow these steps to create a ledger elimination rule.

3. In the Rule field, enter a unique identification for the elimination

6. Enter or select the beginning date as the Effective start date.

FIGURE 8.5 LEDGER ELIMINATION RULE FORM

Procedure: Create a Ledger Elimination Rule - Lines

FIGURE 8.6 LEDGER ELIMINATION RULE LINE FORM

Procedure: Create a Ledger Elimination Rule - Lines with

3. If you select User specified, enter an Account.

5. Select the Source dimensions, if desired, that the amount will be

Procedure: Create a Ledger Elimination Rule - Lines with

1. The Destination account displays User specified.