Consolidation in Microsoft Dynamics NAV: What It Does (and Doesn’t) Do

Consolidation in Microsoft Dynamics NAV: What It Does (and Doesn’t) Do

When clients need to begin consolidating subsidiaries for financial reporting, there are often misconceptions on how this process works in Microsoft Dynamics NAV. After reviewing the setup of the Consolidation company, I like to cover a list of what this process does (and doesn’t) do with them.

First, What It Doesn’t Do

When processing Consolidations, Dynamics NAV does not:

  • Establish detailed G/L Entries from the subsidiary’s daily transactions in the Consolidation company
  • Bring forward posted sub-ledger detail from the subsidiary company (e.g., Customer Ledger, Vendor Ledger, Bank Account Ledger, etc.)
  • Establish Posted Documents from the subsidiary in the Consolidation company
  • Establish G/L Budgets in the Consolidation company
  • Automatically identify or process Elimination entries

OK, Then What Does It Do?

In a nutshell, Microsoft Dynamics NAV does the following when consolidating subsidiaries for financial reporting:

  • Allows you to map different Chart of Account and Dimension structures from the subsidiary companies to the master Consolidation company
  • Allows you to identify the ownership percentage for a subsidiary and automatically applies this percentage to the consolidated financial data
  • Consolidates financial data from subsidiary companies within the same Dynamics NAV database
  • Allows you to consolidate financial data using a file created from another Dynamics NAV database (or any other financial software capable of producing the required file format)
  • Establishes a G/L Entry in the Consolidation company for the net change in the mapped G/L Account(s) balance for the consolidation period for each subsidiary
  • If desired, brings forward the related Dimension detail for the net change G/L Entry that is established
  • Consolidates foreign currency subsidiaries in accordance with standards set in FAS 52-Foreign Currency Translation
  • Allows you to re-consolidate past periods if G/L balances in a subsidiary company have changed
  • Allows financial reporting at both the consolidated and subsidiary level from the Consolidation company

The ‘Dos’ far outweigh the ‘Don’ts’ when it comes to consolidation in Dynamics NAV. Stay tuned for more blogs that discuss the consolidation process in detail.

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