Consolidated Financial Statements for Group Companies

If you run several companies in one ERPNext site, the Consolidated Financial Statement report shows their Balance Sheet, Profit and Loss or Cash Flow side by side, with a total for the group. This page shows how to set up the companies so the report adds them up correctly, and what it does not do.

Set up the group

1. Create a company for the group, for example Bombay Byte Group, and tick Is Group.
2. Open each company of the group, set Parent Company to the group company, and save.
3. Use the same chart of accounts in every company. The report puts accounts on one row when their account name and account number are the same; the company abbreviation at the end is ignored. So Debtors - BBS and Debtors - BBR are added together, but Debtors and Trade Receivables are shown as two rows. The easiest way: when you create a new company, set Create Chart Of Accounts Based On to Existing Company and choose a company that has the chart you want.

Run the report

1. Go to Consolidated Financial Statement.
2. Select the group company in Company. Its child companies are included.
3. Select Report: Balance Sheet, Profit and Loss Statement or Cash Flow.
4. Select the period with Filter Based On and the dates or fiscal years.

The report has a column for each company and a total column.

Companies in different currencies

• Tick Accumulated Values in Group Company to convert each child company's amounts to the group company's currency. The conversion uses the exchange rate on the End Date.
• Or select a Currency to show every amount in that currency.

Without either, amounts in different currencies are added as they are, and the total has no meaning.

Make sure a Currency Exchange rate exists for each currency pair on the End Date.

What the report does not do

• Inter-company elimination. Sales, purchases, receivables and payables between group companies are not removed. Make the elimination as a Journal Entry in the group company (or outside ERPNext) when you prepare the consolidated accounts.
• Minority interest and different fiscal years. These are not handled. Use the same fiscal year in all companies of the group.

The report shows an error or wrong numbers

• "Previous Financial Year is not closed" in the opening row: a company has no Period Closing Voucher for an earlier year. Close the years in order, or turn on Ignore Account closing balance in Accounts Settings. See Period Closing Voucher.
• One company's amounts are missing: check that its Parent Company is the group company.
• The report fails for a period: a transaction may use an account of another company. Run the report for smaller periods to find it, then correct the transaction.

Related

• Period Closing Voucher
• Chart of Accounts
• General Ledger