Ax2009 Enus Finii 06

Chapter 6: Consolidations
CHAPTER 6: 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 2009 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.
Microsoft Official Training Materials for Microsoft Dynamics

Your use of this content is subject to your current services agreement
6-1
Financials II in Microsoft Dynamics AX 2009
Set Up a Consolidation Company

In Microsoft Dynamics AX 2009, a consolidation (parent) company is set up to
accumulate the activity from the subsidiaries. Follow these steps to set up the
consolidation company:
Set up General ledger parameters
Set up a system account
Set up currency and exchange rates
Set up the Chart of Accounts
Procedure: Set Up General Ledger Parameters

Follow these steps to set up General ledger parameters for the companies
involved in the consolidation.
1. Click General ledger, click Setup, and then click Parameters.
2. Select the Consolidated company accounts field.
CAUTION: If the Consolidated company accounts field is selected in the
General Ledger Parameters form, you cannot make entries in the company. If
you are trying to post an entry, you will receive an Infolog error.
Procedure: Set Up a System Account

Follow these steps to set up a system account to automatically post rounding
differences resulting from consolidating subsidiaries with foreign currencies.
1. Click General ledger, click Setup, click Posting, and then click
System accounts.
2. Press CTRL+N to add a line.
6-2

3. In the Posting type field use the arrow to select one of the following:
Balance account for consolidation differences if you are
consolidating an integrated foreign subsidiary.
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 6.1 SYSTEM ACCOUNTS FORM
Procedure: Set Up Currency and Exchange Rates

Follow these steps to set up the standard currency for the consolidation company.
Set up the default currencies used in the subsidiary companies in the consolidated
company.
1. Click General ledger, click Setup, and then click Exchange rates.
2. Press CTRL+N to insert a line for each currency.
NOTE: The Exchange rates form displays an additional tab, Consolidate, when
you select the Consolidated company accounts field in the General ledger
Parameters form.
3. For each currency, use one of the following methods.
o
o
Add the exchange rates for each currency, as discussed in the

General Ledger Setup course in the Financials I collection.
Click the Consolidate tab and enter a fixed exchange rate in the
Closing rate and Average rate fields.

6-3
NOTE: Generally, the value in the Closing rate field is used for balance sheet
accounts and the value in the Average rate field is used for profit and loss
accounts.
FIGURE 6.2 EXCHANGE RATES FORM, CONSOLIDATE TAB
Procedure: Define the Currency for the Parent Company

Follow these steps to designate a company currency for the parent company.
1. Click Basic, click Setup, and then click Company information.
2. Click the Other tab.
3. Click the Currency arrow, and then click the currency for the parent
company.
6-4

Procedure: Set Up the Chart of Accounts
If you are planning to use the fixed rate of exchange for the consolidation
company, the accounts must be marked as such in the Chart of Accounts. Follow
these steps to mark accounts for a fixed rate of exchange.
1. Click General ledger, and then click Chart of Account Details.
2. Select the account, and then click the General tab.
3. Click the Consolidation conversion arrow to select from the
following:
o Select Historical to use the exchange rates set up for the
currency in the consolidated company to value the transactions.
o Select Closing or Average to use the rates entered in the
Closing rate or Average rate fields on the Consolidate tab of
the Exchange rates form to value the transactions.
4. Close the form.

6-5
Lab 6.1 - Set Up a Consolidation Company

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 Consolidation (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 rounding differences from the consolidation should post to

profit and loss account 618160.
The consolidated company will use USD as the default currency, and
the newly acquired subsidiary uses EUR as their currency.
For the initial consolidation, the closing rate for EUR is 158.73 and
the average rate for EUR is 149.25.
The closing rate will be used to value consolidation transactions.
Challenge Yourself!
Help Ken complete Sara's request.
Need a Little Help?
Review the general ledger parameters for the consolidation company.
Designate the system account in the consolidation company.
Set up the consolidation exchange rates in the consolidation

company.
Designate that account 618160 will use the closing rate 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.
3. Ensure that the Consolidated company accounts field is selected.
4. Close the form.
6-6

Follow these steps to designate the system account.
System accounts.
2. Press CTRL+N to create a new line.
3. Click the Posting Type arrow, and then click Profit and loss
account for consolidation differences.
4. In the Ledger 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, and then click Exchange rates.
2. Select the line for the EUR, Euro, and then click the Consolidate
tab.
3. In the Closing rate field, enter 158.73.
4. In the Average rate field, enter 149.25.
5. Close the form.
Follow these steps to designate that account 618160 will use the closing rate for
consolidation purposes.
1.
2.
3.
4.
Click General ledger, and then click Chart of Account Details.

Select account 618160, and then click the General tab.
In the Consolidation conversion field, select Closing.
Close the form.

6-7
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.
Chart of Account Options for Subsidiaries Identical Chart of Accounts

Microsoft Dynamics AX 2009 allows for different options when you are
establishing the relationship between the Chart of Accounts for the consolidated
company and subsidiary company.
The first situation is where the Charts of Accounts are identical in the subsidiary
and the consolidated company. When this is the situation, the Consolidation
account field is selected in the Consolidate Online form during the
consolidation process to transfer the balances to the correct accounts.
Chart of Account Options for Subsidiaries - No

Consolidated Chart of Accounts
The next situation is one where the consolidated company does not have a Chart
of Accounts and the subsidiary Chart of Accounts is being used in the
consolidated company. There are two options when you use this method:
Enter a manual mapping on the Chart of Accounts in the subsidiary.

This causes the mapped accounts to create automatically.
Do not enter any mapping. This causes the Chart of Accounts to be

created in the consolidated company when data transfers from the
subsidiary.
When you perform this kind of consolidation, the Consolidation account field
must not be selected.
NOTE: This method is not appropriate for consolidation of a foreign currency
subsidiary because conversion principles cannot be applied.
Chart of Account Options for Subsidiaries - Different

Chart of Accounts
The last situation is when the consolidated company and the subsidiary company
have different Chart of Accounts structures. In this situation, each account in the
subsidiary must be mapped to the consolidated company.
6-8

Procedure: Map the Chart of Accounts
Follow these steps to map an account in the subsidiary to the consolidated
company.
1. Click General ledger, and click Chart of Account Details.
2. Click the General tab.
3. In the Consolidation account field, enter the Chart of Account
number from the consolidation company.
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 header accounts during consolidation.
FIGURE 6.3 CHART OF ACCOUNTS FORM, GENERAL TAB
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
Dimension field on the Dimension tab in the Consolidation, Export, and
Consolidation, Online forms, in which subsidiary accounts are added to the

6-9

To simplify the dimension structure of the consolidated company, the same
consolidated company dimension must be assigned to several subsidiary
dimensions.
Procedure: Set Up Dimensions

Follow these steps to map a dimension in the subsidiary to the consolidated
company.
1. Click General ledger, and then click Dimensions.
2. Select a dimension value, and then click the General tab.
3. In the Group dimension field, enter the dimension.
NOTE: For the transfers to occur as planned during consolidation, you must
select Consolidation account.
HINT: Set up a new department dimension in the consolidated company to be

the consolidated company. This helps identify where the consolidated entries
originated.
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 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.
Give your opinion and an explanation about Sara's request.
6-10

Perform a Consolidation
Microsoft Dynamics AX 2009 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

Follow these steps when the consolidated company and the subsidiary are in the
same database, so that an online consolidation can occur.
1. Click General ledger, click Periodic, click Consolidate, and then
click Consolidation, Online.
2. Specify a range of accounts, a period of time, and budget model(s) to
use for the consolidation.
3. Select Consolidation account to use the account mapped in the
subsidiary company or if the Chart of Accounts are the same in the
subsidiary company and the consolidated company.
4. Select Current or Budget to include transactions or budget.
5. Select Exchange adjustment for the ledger transactions in the
subsidiary to adjust during consolidation using the data specified on
the Exchange rates form.
6. Click the Dimension tab, and specify the dimensions for which data
should consolidate from the subsidiary.
7. Click the Companies tab, and enter a line for each subsidiary
company that indicates the percentage of ownership and whether
exchange differences post to a balance sheet or profit and loss
account.

6-11

8. Click the Description tab, and enter a meaningful description for the
consolidation.
9. Click OK to process the consolidation immediately or use Batch to
run the consolidation as a batch job.
FIGURE 6.4 CONSOLIDATE ONLINE FORM
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 Consolidation, Export.
2. Specify a range of accounts, a period of time, and budget model(s) to
use for the export.
3. Select Consolidation account to use the account mapped in the
subsidiary company or if the Chart of Accounts are the same in the
subsidiary company and the consolidated company.
6-12

6. Click the Dimension tab, and specify the dimensions for which data
should export from the subsidiary.
account.
8. Click OK to process the export immediately or use Batch to run the
export as a batch job.
When the export is finished, a message lists the number of records
saved in each file. The files are ready for importing into the
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 Consolidation, Import.
2. Click the Criteria tab, and specify a range of accounts, a period of
time, and budget model(s) to use for the import.
account.
6. Click OK to process the import immediately or use Batch to run the
import as a batch job.
Test Your Knowledge

1. What three types of consolidation processes are available in Microsoft
Dynamics AX 2009? (Select all that apply)
( ) Offline
( ) Online
( ) Export
( ) Import

6-13
Lab 6.2 - Perform a Consolidation

Scenario
Sara, the Chief Financial Officer has asked Ken, the Controller, to consolidate
the activity for Contoso Entertainment USA (CEU) from 01/01/2006 through
12/31/2008 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?

1. Use the online option to consolidate the subsidiary.
2. Check the Current field on the Criteria tab to perform the
consolidation.
Step by Step
1. Select the CEC company.
3. In the From period field, enter 01/01/2006.
4. In the To period field, enter 12/31/2008.
5. In the Consolidation account field, do not select the field.
6. In the Current field, select the field.
7. Click the Companies tab.
8. In the Company accounts field, use the arrow to select CEU.
9. In the Share field, enter 100.0.
10. Click the Description tab.
11. In the Description field, enter Initial Consolidation.
12. Click OK. While the consolidation is processing, a status window
displays.
13. Click General ledger, and then click Chart of Account Details.
14. Locate account 110110, Bank Account - USD.
15. Click the Balance button, and then click Balance.
16. Note the balance.
17. Switch to the CEU company and repeat steps 13 through 16. Notice
that the balance for the account is equal in both companies.
6-14

Consolidations Inquiry
After performing a consolidation, it may be necessary to review the entries that
are created. Microsoft Dynamics AX 2009 has functionality to facilitate the
review of the consolidation entries.
To review, click General ledger, click Inquiries, and then click Consolidations.
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 the entry was created and the user ID of the person
who created the entry.
The Transactions button has options of Current or Budget. This enables the
display of the consolidation entries that are created.

6-15
Lab 6.3 - Consolidations Inquiry

Scenario
Ken, the Controller has a meeting with Sara, the Chief Financial Officer. The
newly created consolidation company is on the agenda. Sara asks whether it is
possible to view all the transactions created by the recently processed
consolidation.
Challenge Yourself!
Help Ken show Sara how to view the transactions from the consolidation.
Step by Step
1. On the Status bar, double-click the company field.
2. Click the line for CEC, and then click OK.
3. Click General ledger, click Inquiries, and then click
Consolidations.
4. Click the Transactions button, and then click Current.
5. Review the transactions.
6. Close the form.
6-16

View and Delete Consolidation Transactions

There may be times when it is necessary to remove consolidation transactions.
For example, a data entry error may be made when a user sets up the
consolidation process. Microsoft Dynamics AX 2009 has functionality to
simplify the deletion of consolidation entries.
Procedure: Remove Consolidation Transactions

Follow these steps to remove consolidation transactions.
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.

6-17
Lab 6.4 - View and Delete Consolidation Transactions

Scenario
Ken, the Controller, receives a frantic call from Sara, the Chief Financial Officer.
The recent consolidation that was processed in CEC is incorrect; Sara had
provided the incorrect dates. She wants to know whether the transaction can be
deleted.
Challenge Yourself
Remove the transactions resulting from the initial consolidation.
Step by Step
Consolidation.
2. Click the line for Initial Consolidation.
3. Click the Remove transactions button.
4. Click OK in the confirmation form. When the deletion is complete,
an Infolog form displays.
5. Close the Infolog form.
6. Close the Consolidations form.
6-18

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.
In earlier versions of Microsoft Dynamics AX, the recording of an elimination
transaction is a manual process. In Microsoft Dynamics AX 2009, the automation
of elimination transactions decreases the complexity and time that is required for
the consolidation process.
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.
Types of Companies
Refer to the following table for descriptions of the types of companies associated
with intercompany eliminations.
Term
Description
Consolidation
Company
A company created to report financial results for a 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 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.

6-19

Procedure: Designate an Elimination Company
Follow these steps to designate a company as an elimination company, which
will allow you to create elimination transactions in the company.
1. Select the company to designate as an elimination company.
3. On the Ledger tab in the Eliminate section, select the Elimination
company option.
Procedure: Create a Ledger Elimination Rule - Overview

Elimination rules are the setup part 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 the Consolidation company. To designate a company as a
Consolidation company, select the Consolidated company accounts option in the
General ledger parameters form.
Follow these steps to create a ledger elimination rule.
Ledger elimination rule.
2. Press CTRL+N to create a new rule.
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 General ledger
parameters form for the destination company.
6-20

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.
FIGURE 6.5 LEDGER ELIMINATION RULE FORM

6-21

Procedure: Create a Ledger Elimination Rule - General
Follow these steps to enter the general information for a ledger elimination rule.
1. On the General tab of the Ledger elimination rule form, view
information previously designated on the Overview tab including the
elimination rule, description, destination company, and starting
and ending dates for the elimination rule.
2. In the Date last run field, view when the elimination rule last was
processed successfully.
3. In the Journal settings section, select a journal Name with the type
of elimination.
FIGURE 6.6 LEDGER ELIMINATION RULE FORM, GENERAL TAB
6-22

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. Press CTRL+N.
3. From the drop-down list, select an Elimination method.
Net change: Eliminates an account's net change for a specified
date range. This is the most common elimination method.
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 6.7 LEDGER ELIMINATION RULE LINE FORM

6-23

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 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:
Source: The respective account field will be disabled.
User specified: Enter an account.
3. If you select User specified, enter an Account.

4. In the Destination dimension field, select from the drop-down list:
Source: The respective dimension field will be disabled.
User specified: Enter zero or one dimension codes for every

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

eliminated from.
6. In the Dimension fields, select dimensions 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 the transaction will post to. The destination
dimensions displays User specified.
3. Enter an Amount.
4. In the Dimension fields, select dimensions transactions will post to
for the elimination rule.
6-24

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 may 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.
Follow these steps to create an elimination journal proposal.
1.
2.
3.
4.
5.
Click General Ledger, click Journals, and then click Elimination.

Press CTRL+N to create a new journal.
Click the Lines button.
Click the Proposals button, and then click Elimination proposal.
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
successfully created displays in the Date last run field.

6-25

9. Enter the beginning and ending dates by which ledger amounts will
be retried 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.
FIGURE 6.8 ELIMINATION PROPOSAL FORM
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 see 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.
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.
6-26

4. In the Proposal options field, select from the drop-down list.
Proposal only: Journals are created.
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.
FIGURE 6.9 CONSOLIDATE ONLINE FORM, ELIMINATION TAB
Test Your Knowledge

1. When is using an intercompany elimination necessary?

6-27

2. 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
Summary
This section described the setting up and processing of a consolidation using
Microsoft Dynamics AX 2009.
Users who decide to apply the information provided can set up their system for
consolidations.
6-28

Test Your Knowledge

Test your knowledge with the following questions.
1. Should transactions other than the consolidation transactions be processed in
a consolidated company?

6-29
Quick Interaction: Lessons Learned

Take a moment and write down three key points you have learned from this
chapter
1.
2.
3.
6-30

Solutions
Set Up a Subsidiary Company
1. Ken, the Controller at Contoso Entertainment USA (CEU), discusses the
Contoso Entertainment Consolidation (CEC) company with Sara, the Chief
Financial Officer. They agree 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.
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).
Perform a Consolidation
1. What three types of consolidation processes are available in Microsoft
Dynamics AX 2009? (Select all that apply)
( ) Offline
() Online
() Export
() Import
Intercompany Eliminations
1. 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.

6-31

2. 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
Test Your Knowledge

1. 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.
6-32


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Chapter 6: Consolidations

Set up a consolidation company

Set up a subsidiary company

View the Consolidations inquiry

View and delete consolidation transactions

Describe intercompany eliminations

Consolidate companies whether they reside in the same database or

Map the Chart of Accounts and dimensions in a subsidiary to the

Designate the percentage of ownership that should roll into the

Microsoft Official Training Materials for Microsoft Dynamics

Financials II in Microsoft Dynamics AX 2009

Set Up a Consolidation Company

Set up General ledger parameters

Set up a system account

Set up currency and exchange rates

Set up the Chart of Accounts

Procedure: Set Up General Ledger Parameters

Procedure: Set Up a System Account

Microsoft Official Training Materials for Microsoft Dynamics

Profit & loss account for consolidation differences if you are

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

FIGURE 6.1 SYSTEM ACCOUNTS FORM

Procedure: Set Up Currency and Exchange Rates

Add the exchange rates for each currency, as discussed in the

Microsoft Official Training Materials for Microsoft Dynamics

Financials II in Microsoft Dynamics AX 2009

FIGURE 6.2 EXCHANGE RATES FORM, CONSOLIDATE TAB

Procedure: Define the Currency for the Parent Company

Microsoft Official Training Materials for Microsoft Dynamics

Microsoft Official Training Materials for Microsoft Dynamics

Financials II in Microsoft Dynamics AX 2009

Lab 6.1 - Set Up a Consolidation Company

Any rounding differences from the consolidation should post to

The closing rate will be used to value consolidation transactions.

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Review the general ledger parameters for the consolidation company.

Designate the system account in the consolidation company.

Set up the consolidation exchange rates in the consolidation

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Click General ledger, and then click Chart of Account Details.

Microsoft Official Training Materials for Microsoft Dynamics

Financials II in Microsoft Dynamics AX 2009

Set Up a Subsidiary Company

Chart of Account Options for Subsidiaries Identical Chart of Accounts

Chart of Account Options for Subsidiaries - No

Enter a manual mapping on the Chart of Accounts in the subsidiary.

Do not enter any mapping. This causes the Chart of Accounts to be

Chart of Account Options for Subsidiaries - Different

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FIGURE 6.3 CHART OF ACCOUNTS FORM, GENERAL TAB

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Financials II in Microsoft Dynamics AX 2009

Procedure: Set Up Dimensions

HINT: Set up a new department dimension in the consolidated company to be

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From the same database using the online option

From and, or to another database using the Import/Export option

Procedure: Consolidation, Online

Microsoft Official Training Materials for Microsoft Dynamics

Financials II in Microsoft Dynamics AX 2009

FIGURE 6.4 CONSOLIDATE ONLINE FORM

Procedure: Consolidation, Export

Microsoft Official Training Materials for Microsoft Dynamics