Consolidation

Complete guide to multi-subsidiary consolidation in NetSuite OneWorld.

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Overview

CONSOLIDATION PROCESS
═══════════════════════════════════════════════════════════════════

SUBSIDIARY CLOSE               CONSOLIDATION              COMBINED
────────────────               ─────────────              ────────

┌─────────────┐
│ US Corp     │──────┐
│ (Parent)    │      │
└─────────────┘      │
                     │     ┌─────────────────┐
┌─────────────┐      │     │                 │
│ UK Ltd      │──────┼────►│  CONSOLIDATION  │────► Consolidated
│ (Child)     │      │     │                 │      Financial
└─────────────┘      │     │  • Translation  │      Statements
                     │     │  • Elimination  │
┌─────────────┐      │     │  • Combination  │
│ Germany GmbH│──────┘     │                 │
│ (Child)     │            └─────────────────┘
└─────────────┘

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Subsidiary Close Sequence

Close Order

[!IMPORTANT] Child subsidiaries must close BEFORE parent for proper consolidation.

SUBSIDIARY CLOSE SEQUENCE
───────────────────────────────────────────────────────────

LEVEL 3 (Lowest)    LEVEL 2              LEVEL 1 (Parent)
────────────────    ───────              ────────────────

UK Operations   ─┐
                 ├─► Europe Region ────┐
Germany Ops    ─┘                      │
                                       ├─► Global Corp
Asia Pacific   ─────────────────────────┘
                                       │
US Operations  ─────────────────────────┘

Close Order:
  1. UK Operations    ✓ Close first
  2. Germany Ops      ✓ Close first
  3. Asia Pacific     ✓ Close first
  4. Europe Region    ✓ Close after children
  5. Global Corp      ✓ Close last

Subsidiary Close Status

CONSOLIDATION STATUS VIEW
───────────────────────────────────────────────────────────

Period: January 2026

Subsidiary          Status        Ready to Consolidate
──────────          ──────        ────────────────────
Global Corp         Open          ○ No (parent)
├─ US Operations    Closed        ✓ Yes
├─ Europe Region    AR/AP Closed  ○ Pending
│  ├─ UK Ltd        Closed        ✓ Yes
│  └─ Germany GmbH  Closed        ✓ Yes
└─ Asia Pacific     Closed        ✓ Yes

Note: Europe Region must complete close before consolidation

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Currency Translation

Translation Process

CURRENCY TRANSLATION
═══════════════════════════════════════════════════════════════════

Foreign Subsidiary: UK Ltd (GBP)
Parent Currency: USD
Period-End Rate: 1 GBP = 1.265 USD
Average Rate: 1 GBP = 1.258 USD

BALANCE SHEET TRANSLATION (Period-End Rate):
  Account               GBP          Rate      USD
  ───────               ───          ────      ───
  Cash                  £100,000     1.265     $126,500
  A/R                   £50,000      1.265     $63,250
  Fixed Assets          £200,000     1.265*    $253,000
  A/P                   (£30,000)    1.265     ($37,950)

  * Fixed assets may use historical rate

INCOME STATEMENT TRANSLATION (Average Rate):
  Account               GBP          Rate      USD
  ───────               ───          ────      ───
  Revenue               £500,000     1.258     $629,000
  COGS                  (£300,000)   1.258     ($377,400)
  OpEx                  (£100,000)   1.258     ($125,800)
  Net Income            £100,000     1.258     $125,800

Translation Adjustment (CTA)

CUMULATIVE TRANSLATION ADJUSTMENT
───────────────────────────────────────────────────────────

The CTA captures FX translation differences:

Net Assets at Historical Rate:     $500,000
Net Assets at Current Rate:        $512,000
────────────────────────────────────────────
Translation Adjustment:             $12,000

Entry:
  Balance Sheet (Various)          $12,000  Adjustment
  Cumulative Translation Adj              $12,000  (Equity)

CTA appears in:
  Stockholders' Equity
  └── Other Comprehensive Income
      └── Cumulative Translation Adjustment

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Calculate Consolidated Exchange Rates

Rate Calculation Task

CALCULATE CONSOLIDATED RATES
───────────────────────────────────────────────────────────

Navigation: Period Close Checklist > Calculate Consolidated Rates

Prerequisites:
  ✓ All subsidiary currency rates entered
  ✓ FX Revaluation complete

Configuration:
┌────────────────────────────────────────────────────────┐
│ Period:          January 2026                          │
│ Parent:          Global Corp (USD)                     │
│                                                        │
│ Rate Calculation:                                      │
│   Balance Sheet:  ● Period-End Rate                   │
│                   ○ Average Rate                       │
│                                                        │
│   Income Stmt:    ○ Period-End Rate                   │
│                   ● Average Rate                       │
└────────────────────────────────────────────────────────┘

Output:
┌────────────────────────────────────────────────────────┐
│ Currency    BS Rate      IS Rate                       │
│ ────────    ───────      ───────                       │
│ GBP         1.2650       1.2580                        │
│ EUR         1.0850       1.0820                        │
│ JPY         0.0067       0.0066                        │
│ CAD         0.7425       0.7400                        │
└────────────────────────────────────────────────────────┘

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Elimination Rules

Setting Up Elimination Rules

ELIMINATION RULES SETUP
───────────────────────────────────────────────────────────

Navigation: Setup > Accounting > Elimination Rules

Types of Elimination:

1. INTERCOMPANY REVENUE/EXPENSE
   ┌────────────────────────────────────────────────────┐
   │ Eliminate: IC Revenue (4500)                       │
   │ Against:   IC COGS (5500)                          │
   │ Method:    Net to Zero                             │
   └────────────────────────────────────────────────────┘

2. INTERCOMPANY BALANCES
   ┌────────────────────────────────────────────────────┐
   │ Eliminate: IC Receivable (1250)                    │
   │ Against:   IC Payable (2050)                       │
   │ Method:    Net to Zero                             │
   └────────────────────────────────────────────────────┘

3. INVESTMENT IN SUBSIDIARY
   ┌────────────────────────────────────────────────────┐
   │ Eliminate: Investment in Sub (1800)                │
   │ Against:   Subsidiary Equity                       │
   │ Method:    Full Elimination                        │
   └────────────────────────────────────────────────────┘

Elimination Account Structure

Elimination Type	Debit Account	Credit Account
IC Revenue	IC Revenue	Elimination Offset
IC COGS	Elimination Offset	IC COGS
IC Receivable	IC Payable	IC Receivable
IC Payable	IC Payable	IC Receivable
Investment	Subsidiary Equity	Investment in Sub

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Consolidation Journal Entries

System-Generated Entries

CONSOLIDATION JOURNAL ENTRIES
───────────────────────────────────────────────────────────

1. TRANSLATION ENTRY (Per Subsidiary)
   Foreign Sub Net Assets:  $512,000
   At Historical:           $500,000
   ─────────────────────────────────
   CTA Entry:
     Various BS Accounts    $12,000  Dr
     CTA (Equity)                   $12,000  Cr

2. IC ELIMINATION ENTRY
   IC Revenue               $500,000  Dr
   IC COGS                           $500,000  Cr

   IC Payable               $150,000  Dr
   IC Receivable                     $150,000  Cr

3. INVESTMENT ELIMINATION (if applicable)
   Common Stock (Sub)       $100,000  Dr
   Retained Earnings (Sub)  $400,000  Dr
   Investment in Sub                 $500,000  Cr

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Minority Interest (Non-Controlling Interest)

When Less Than 100% Owned

MINORITY INTEREST CALCULATION
───────────────────────────────────────────────────────────

Subsidiary: UK Ltd
Parent Ownership: 80%
Minority Interest: 20%

UK Ltd Net Income: $100,000

Allocation:
  Parent Share (80%):    $80,000  → Consolidated Net Income
  NCI Share (20%):       $20,000  → Non-Controlling Interest

UK Ltd Equity: $500,000

Allocation:
  Parent Share (80%):    $400,000 → Consolidated Equity
  NCI Share (20%):       $100,000 → NCI (Equity Line Item)

Consolidated Statements Show:
  Net Income attributable to parent:  $X,XXX,XXX
  Net Income attributable to NCI:     $XXX,XXX

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Consolidated Financial Statements

Generating Consolidated Reports

CONSOLIDATED FINANCIAL STATEMENTS
───────────────────────────────────────────────────────────

Navigation: Reports > Financial > (Select Report)

Filter Settings:
┌────────────────────────────────────────────────────────┐
│ Subsidiary:     ● Consolidated                        │
│                 ○ [Specific Subsidiary]               │
│                                                        │
│ Include:        ☑ All Subsidiaries                   │
│                 ☐ Exclude Inactive                    │
│                                                        │
│ Eliminations:   ● Include Eliminations               │
│                 ○ Exclude Eliminations                │
│                                                        │
│ Currency:       USD (Parent Currency)                 │
└────────────────────────────────────────────────────────┘

Balance Sheet (Consolidated)

CONSOLIDATED BALANCE SHEET
───────────────────────────────────────────────────────────

Global Corp and Subsidiaries
As of January 31, 2026

ASSETS                                          USD
──────                                          ───
Current Assets
  Cash and Equivalents                      $2,500,000
  Accounts Receivable (net)                 $1,800,000
  Inventory                                 $1,200,000
    Total Current Assets                    $5,500,000

Non-Current Assets
  Property, Plant & Equipment (net)         $3,000,000
  Intangible Assets                           $500,000
    Total Non-Current Assets                $3,500,000

TOTAL ASSETS                                $9,000,000

LIABILITIES & EQUITY
────────────────────
Current Liabilities
  Accounts Payable                          $1,200,000
  Accrued Expenses                            $500,000
    Total Current Liabilities               $1,700,000

Stockholders' Equity
  Common Stock                                $500,000
  Retained Earnings                         $6,580,000
  Cumulative Translation Adjustment           $120,000
  Non-Controlling Interest                    $100,000
    Total Equity                            $7,300,000

TOTAL LIABILITIES & EQUITY                  $9,000,000

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Consolidation Checklist

CONSOLIDATION CLOSE CHECKLIST
═══════════════════════════════════════════════════════════════════

BEFORE CONSOLIDATION:
□ All child subsidiaries closed
□ IC balances reconciled and balanced
□ IC adjustments created
□ FX revaluation complete for all subs
□ Period-end exchange rates entered

CONSOLIDATION TASKS:
□ Calculate Consolidated Exchange Rates
□ Create IC Eliminations
□ Review CTA adjustments
□ Verify minority interest calculations

POST-CONSOLIDATION:
□ Run consolidated trial balance
□ Review consolidated financials
□ Verify eliminations netted correctly
□ Close parent subsidiary
□ Final period close

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Best Practices

Consolidation Management

Practice	Recommendation
Close sequence	Always children before parent
Rate timing	Enter rates before month-end
IC review	Daily IC balance monitoring
Documentation	Record all manual adjustments
Validation	Verify eliminations each period

Common Issues

Issue	Cause	Resolution
CTA variance	Rate source inconsistency	Use single rate source
IC not eliminated	Missing elimination rule	Add rule for account
NCI incorrect	Ownership % changed	Update sub record
Sub not consolidating	Not marked for consolidation	Check sub settings

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Related Topics

• Intercompany - IC eliminations
• Foreign Currency - Currency translation
• Period Close Checklist - All close tasks