Consolidation finance
Combining the financial statements of multiple legal entities into one, eliminating intercompany transactions to avoid double counting.
Detail
When a group operates with multiple legal entities (typical in LATAM due to tax structure), each keeps independent books. To report to shareholders or banks, books are consolidated: balances are summed, currencies converted to a functional one, and intercompany transactions (sales between affiliates, internal loans, dividends) are eliminated. A poorly executed consolidation inflates revenue and duplicates assets. In cifraHQ Enterprise, consolidation is a native module, not an Excel export: intercompany pairs reconcile automatically, eliminations are auditable entries with explicit counterparts, and FX differences land in equity accounts per standard (IFRS: cumulative translation adjustment in OCI).
See also
Intercompany
Transactions between legal entities in the same group: sales, loans, dividends. Must be eliminated upon consolidation.
Consolidation elimination
Entry that cancels the duplicated effect of intercompany transactions when combining books across multiple entities.
Source-currency preservation
Preserving the original amount and currency of each transaction, not only the converted equivalent. Essential for audit and correct FX gain/loss.
How does cifraHQ model Consolidation?
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