It is a common requirement between our clients to create consolidated reports of their companies. To manage this requirement, they have two options: create a consolidation entity in AX or create consolidation report in Management Reporter.
This article presents the configuration and process of the consolidation entity in AX, eliminating the transactions from Due to/from accounts.
1. Create consolidation and elimination entity and check the boxes for “Use for financial consolidation process” and “Use for financial elimination process
2. Add the new entity into the organization hierarchy.
3. Generate number sequences using the Generate wizard in the new entity.
4. Create a number sequence for elimination journals.
5. Modify the General ledger parameters to use transfer mode Synchronous.
6. Configure the General Ledger setup, adding the Chart of accounts, account structure, fiscal calendar and accounting currency.
7. Create an elimination journal name and use the number sequence created previously.
8. Configure the accounts for automatic transactions.
9. Create elimination rules, adding the accounts that should be consolidated.
- Elimination method
- Net change: will eliminate the amount depending on the transaction amount.
- Fixed amount: will eliminate the amount specified by the user.
- Source account: this is the account with the transactions that need to be eliminated.
- Account specification.
- Source: will post the elimination in the same account
- User specified: will post the elimination in the account selected in destination account.
- Fixed amount: if in the elimination method it was selected Fixed amount, in this field should filled the amount.
This is an example of how the consolidation process will work with intercompany transactions, consolidating the Due to/from ledger accounts for the entities.
1. Create intercompany transaction
2. Run the consolidation in the option General Ledger > Periodic > Consolidate > Consolidate [Online]
- Main account: select the accounts that should be included in the consolidation
- Consolidation period: select the range of dates for the consolidation
- Mark the boxed for Include actual amount and Rebuild balances during consolidation process
In the legal entities tab, select the legal entities that should be consolidated. Click on OK.
3. Go to General ledger > Journals > Elimination, create a new journal and open lines. Click on Proposals > Elimination proposal.
- Source company: select the elimination company
- Rule: select the elimination rule
- Period: ranges of dates of the transactions that should be eliminated
- GL posting date: date to post the elimination transactions for the accounts in the rule
This proposal will create a journal with the amounts from the intercompany accounts to consolidate them.
4. The final step is to validate the Trial balance in the consolidation entity. Due to/from accounts will be zero and the other accounts will have the total sum from the entities selected.
About the Author
Liliana Orjuela is a Systems Engineer with a Master’s degree in Management Engineering. She has been working with Microsoft Dynamics AX since 2010 and currently is a Microsoft Dynamics AX/365 for Enterprise Senior Consultant at Pangea Group. Liliana’s experience includes customers in industries as technology, construction and telecommunications.