Overview
Dynamics 365 Finance provides extensive Financial Consolidation capabilities through both dedicated Consolidations functionality and comprehensive Financial Reporting capabilities that can be used discretely or in combination to support your organisations consolidations requirements.
Supported Consolidation Scenarios
Dynamics 365 Finance supports the financial consolidation scenarios bullet pointed below, with most scenarios being supported by both dedicated Consolidations functionality and the Financial Reporting toolset.
- Single and Multi-Level Consolidations
- Multiple Reporting Currencies
- Multiple Charts of Accounts across Legal Entities
- Differing Financial Calendars across Legal Entities
- Inter Company Eliminations
- Consolidation Adjustments
- Minority Interests
- Legal Entities operated in multiple instances of Dynamics 365 Finance
- Import Subsidiary balances from a non Dynamics 365 Finance data source
Legal Entities and Organisation Hierarchies
Dynamics 365 Financial Reporter supports the creation of Consolidated Financial Statements by sourcing balances from individual subsidiary companies and calculating consolidated balances etc as part of the report definition. As a result, it is not necessary for parent or group companies to form part of Dynamics 365 Finance setup in order to generate consolidated financial statements.
Dynamics 365 Finance Consolidations functionality requires Group or Parent companies to be setup as distinct Legal Entities and to be set to ‘use for consolidations’, to enable and support the use of the Consolidate Online and related functionality.
Organisation Hierarchy functionality provides the ability to model legal entity relationships and structures. This facility enhances interaction with the viewing of financial reporter outputs, including consolidated financial statements through the reporting tree capability.
Consolidate Online
Dynamics 365 Finance is provided with formal Consolidations functionality that enables a consolidated general ledger and optionally consolidated financial budget positions to be created and maintained within specifically configured consolidation legal entities.
The consolidation process is run from within the (parent, consolidation) company that the subsidiary companies general ledger balances are to be consolidated into … and all criteria for that consolidation process are specified at run-time e.g. GL main account ranges, use of consolidation accounts (multiple chart of accounts scenario) if required, date range etc.
Consolidated ledger balances can be inquired and reported on using standard General Ledger e.g. Trial Balance, Budgeting and Financial Reporter functionality supplemented by a specific consolidation transactions enquiry.
Financial Reporting
Dynamics 365 Finance is provided with Financial Reporter, a functionally rich and fully integrated financial reporting toolset specifically designed and developed to enable key finance users to define and create Financial Statements type reports based on General Ledger actual and financial budget and forecast values.
Financial Reporter provides extended capabilities that enable the Consolidated Financial Statements to be defined and generated without any need to perform a formal company consolidation process.
Consolidate Online vs Financial Reporting
The following Microsoft Blog post helps to provide further insight into the best approach to consolidations for your organisation in Dynamics 365 i.e. Consolidate Online or Financial Reporting
Further Information
The Microsoft Docs site provides extensive information on Dynamics 365 Finance consolidations capabilities and functionality, with key links beings provided via the URLs below.
Financial consolidations and currency translation overview – Finance | Dynamics 365 | Microsoft Docs
Online financial consolidations – Finance | Dynamics 365 | Microsoft Docs
Generate consolidated financial statements – Finance | Dynamics 365 | Microsoft Docs
Video
The video below is from the Microsoft Tech Conference 2017 and provides an extended walk through of Dynamics 365 Finance Consolidations capabilities.
Current functionality as of Dec 2021 remains the same as presented.