Understanding PeopleSoft Enterprise Global Consolidations

This section discusses:

Click to jump to top of pageClick to jump to parent topicPeopleSoft Enterprise Global Consolidations Overview

PeopleSoft Enterprise Global Consolidations enables you to eliminate the effect of certain transactions among consolidated entities, and to equitize current period earnings of subsidiaries. The types of transactions that the system eliminates are:

During consolidation processing, the system generates eliminating journal entries to an elimination entity that is designed specifically to support consolidated reporting. The primary purpose of consolidation processing is to generate the elimination accounting entries necessary when combining multiple units into one, in order to prevent inflating or overstating numbers by double counting transactions or investments within a dimension. The output of consolidation processing is a journal entry at the consolidation elimination node, which contains the elimination adjustment accounting entries.

PeopleSoft Enterprise Performance Warehouse serves as the repository for all of the data that the system consolidates. Using PeopleSoft Enterprise Performance Warehouse, you can load data from multiple sources that have different structures. Global Consolidations provides the tools with which you define the data and its structure, ultimately merging it into a consolidation ledger that shares a common accounting structure, common accounting calendar, and common currency. You can base your consolidations on business unit or any other dimension. How you consolidate depends on your specific reporting needs.

Note. Throughout this documentation, the terms ChartField and dimension are used interchangeably. ChartFields refer to a segment within a chart of accounts, while a dimension provides a broader way to categorize data.

Click to jump to top of pageClick to jump to parent topicPeopleSoft Enterprise Global Consolidations Components

This section discusses:

Click to jump to top of pageClick to jump to parent topicThe Consolidation Model

A consolidation model describes all of the components and rules used for a particular consolidation. It associates the mapping rules and business rules used for processing consolidations with the consolidation tree, the consolidation ledger, and the consolidation dimension. The Consolidation Model page contains links that enable you to review, modify, or create the supporting rules and objects used in a consolidation. When defining the parameters for your consolidation, you can use the Consolidation Model page as the main way to access all of the pages that are used to define a consolidation.

This screenshot shows how to enter parameters for the consolidation model:

Each consolidation model is associated with a scenario ID. When establishing scenarios for use with consolidations, select the Consolidated check box on the Scenario Definition page. You define multiple scenarios to process multiple consolidations that use different business rules, such as different base currencies, different consolidation trees, or different consolidation rules. When you run the consolidation processes, the system derives the correct consolidation model based on the input parameters of the common consolidation business unit and scenario.

Click to jump to top of pageClick to jump to parent topicThe Common Consolidation Business Unit

When processing consolidations, you run the process for a specific business unit, scenario, fiscal year, and accounting period. For consolidations, this business unit must be the “common consolidation business unit.” This represents the highest level business unit to which your data is consolidated. It doesn't necessarily represent an actual business unit in your organization; it can be a “logical” business unit. You associate this business unit with the consolidation ledger, which stores the activity related to a consolidation. This business unit is the basis for your consolidation reports, processing, and inquiries. To set up a common consolidation business unit, use the Performance Business Unit page, and set the business unit type to consolidated. You must use the common consolidation business unit as the business unit for the scenario ID to which you associate the consolidation model.

Click to jump to top of pageClick to jump to parent topicElimination Entities and the Consolidation Tree

The hierarchical reporting relationships among the entities in a consolidation are defined in a node-oriented consolidation tree. Each branch of the tree must contain a single elimination entity. The journals that result from consolidation processing at each branch (eliminations for minority interest, intercompany transactions, or equitization) are booked to these elimination entities.

For example, World Wide Consolidation is composed of multiple business units, with consolidation occurring at several levels before ultimately consolidating to World Wide Consolidation, which is the common consolidation business unit. For financial reporting requirements, a tree that defines the legal entity relationships among these business units was created, which is the consolidation tree. Note that each branch contains an elimination entity:

Elimination entities

If your consolidation is by business unit, the elimination entity must be a defined performance business unit. If your consolidation is by another dimension, such as department, then the dimension values (the Dept IDs) must be defined. In either case, the elimination entity must be identified by using the Elimination Entity page. When you consolidate by a dimension other than business unit, you still need to create a business unit tree, as the ledger preparation process requires it.

Click to jump to top of pageClick to jump to parent topicMapping Rules and Ledger Preparation

Before you process consolidations, you must move the individual subsidiary business unit ledger data into a consolidation ledger table. For this to occur, you must establish a common structure among the various ledgers by defining mapping rules for calendars, currency, and accounts (ChartFields). These rules define what the data in the individual ledgers represents with respect to the consolidation ledger. For example, your consolidation ledger uses an accounting calendar that includes 12 periods and begins on January 1. The ledgers from your various subsidiary business units may not follow this same calendar. The calendar mapping rule defines how data is mapped from the subsidiary calendars to the consolidation ledger's accounting calendar so that the subsidiary data moves to the appropriate period of the consolidation ledger. After you define the mapping rules, you run the Ledger Preparation process, which moves the various subsidiary ledger data into the consolidation ledger, mapping it according to the associated mapping rules. The consolidation ledger is used as input for consolidation processing. If your subsidiary ledgers are already in the same format as the consolidation ledger, then you can indicate in your mapping rules that no mapping is required.

Click to jump to top of pageClick to jump to parent topicConsolidation Rules

The consolidation rules that you establish define how to:

These rules are referred to as elimination rules, noncontrolling interest rules, equitization rules, and balancing account type rules.

Click to jump to top of pageClick to jump to parent topicLedger Preparation Manager

The Ledger Preparation Manager page conveys the status of each phase of ledger preparation processing. This interactive page enables you to quickly visualize the status of preparing your subsidiary ledger data and view details for any phase; you can configure this page to best suit your implementation.

The ledger preparation manager has 2 views, one for Preparation phase (up to and including loading the consolidation ledger) which is tracked by source BU and source ledger, and another view for enrichment (activities on console ledger after prep but before consolidation) which is tracked only by source BU and not source ledger.

Click to jump to top of pageClick to jump to parent topicConsolidation Manager

The Consolidation Manager page conveys the status of each phase of consolidation processing. This interactive page enables you to quickly visualize the status of processing consolidations and view details for any phase; you can configure this page to best suit your implementation.

Click to jump to top of pageClick to jump to parent topicPeopleSoft Enterprise Global Consolidations Phases

This section discusses:

Click to jump to top of pageClick to jump to parent topicGlobal Consolidations Phases Overview

You complete these phases while using Global Consolidations:

  1. Load your subsidiary ledger data.

  2. Standardize and transform the subsidiary ledger data to the common consolidation ledger structure, and load it into the consolidation ledger.

  3. Process consolidations.

  4. Review and analyze the consolidated results; generate reports.

This diagram illustrates the Consolidations Phases of PeopleSoft Enterprise Global Consolidations:

Global Consolidations Phases page

Click to jump to top of pageClick to jump to parent topicLoad Data

First, you load your subsidiary data into PeopleSoft Enterprise Performance Warehouse by using the extract and load tools, the source data (flat file) load utility, or the online manual ledger data entry component.

Click to jump to top of pageClick to jump to parent topicStandardize and Transform Data

During this phase, you define ledger mapping rules, then run the ledger preparation process, which transforms your data to the common consolidation structure, and moves the data into the consolidation ledger. There is an optional first step in the preparation process which is to validate the source data based on user defined rules. Also during this phase, you define the main consolidation components, ledger structures, business units, consolidation trees, models, and scenarios.

Click to jump to top of pageClick to jump to parent topicProcess Consolidations

During this phase, you establish the consolidation rules, and process consolidations. If necessary, you can enter manual journals to make adjustments to your subsidiary data, and also process allocations. The main Global Consolidation processes are Eliminations and Equitizations.

Elimination processing uses the elimination and noncontrolling interest rules to eliminate amounts due to intercompany transactions, eliminate parent investment and subsidiary equity amounts, and generate a noncontrolling interest offset.

Equitization processing uses the equitization rules to equitize the current period earnings of subsidiaries, booking the earnings to the parent. It also generates noncontrolling interest adjustments against the subsidiary’s change in equity.

The output of running these processes are journals that you post to the consolidation ledger, either as the last step during processing, or later by running the PeopleSoft Enterprise Performance Warehouse Ledger Post engine.

Optionally, you can define tolerance amounts in your consolidation rules. If any journal entries generated during consolidation processing are out of balance by an amount greater than the tolerance, the journal is held from posting, and an email can be automatically sent to a designated person, alerting the person to conditions that need to be investigated.

Optionally you can publish journals from consolidations back to your source general ledger. This applies to journals that were manually entered, generated through allocations, or generated by the consolidation processes.

You can complete close processing in the consolidation ledger – year-end close and rollforward for all ledger types, and period-end rollforward for financial statement ledger types. 3) You can also track flows for journal activity.

Click to jump to top of pageClick to jump to parent topicReport and Analyze Consolidation Results

In this phase, which takes place once consolidation is complete, you use the available analysis and reporting tools to review and analyze your results. There are many online pages that enable you to view the results, as well as the Consolidation Manager and Ledger Preparation Manager pages, which show you the progress of various stages of processing. In addition, PeopleSoft delivers several report definitions to generate hardcopy reports using Structured Query Report and PS n/Vision.

Click to jump to top of pageClick to jump to parent topicPeopleSoft Enterprise Global Consolidations Processes

This section discusses:

Click to jump to top of pageClick to jump to parent topicThe Ledger Preparation Process

The ledger preparation process moves your source subsidiary ledger data from the data warehouse into the consolidation ledger by using mapping rules to convert the data to the common consolidation structure during the process. Optionally, you can us the ledger verification rules and process to verify that your ledger data is valid and ready for the ledger preparation process.

Click to jump to top of pageClick to jump to parent topicThe Elimination Process

The elimination process eliminates balances attributed to intercompany transactions from the consolidation ledger by using elimination rules to determine the accounts to process. Optionally, it also eliminates parent investment and subsidiary equity amounts and creates a noncontrolling interest offset, by using noncontrolling interest rules and ownership relationships to calculate the amounts to eliminate.

Click to jump to top of pageClick to jump to parent topicThe Equitization Process

The equitization process recognizes a parent's equity in the earnings of a qualifying subsidiary and generates the associated elimination entries. Running this process is optional; whether you choose to use it depends on your organization's reporting requirements.

Click to jump to top of pageClick to jump to parent topicPeopleSoft Enterprise Global Consolidations Data Flow

These diagrams illustrate the flow of data through PeopleSoft Enterprise Global Consolidations:

PeopleSoft Global Consolidations data flow (1 of 3)

PeopleSoft Global Consolidations data flow (2 of 3)

PeopleSoft Global Consolidations data flow (3 of 3)

Click to jump to top of pageClick to jump to parent topicPeopleSoft Enterprise Global Consolidations Security

PeopleSoft Enterprise Global Consolidations uses the security defined within PeopleSoft Enterprise Performance Warehouse to control access to data. To enable row-level security, use the General Options page.

See Also

Understanding System-Wide Security and Processing Options