Generally speaking when we think about consolidation, we always refer to the fact of bringing two or multiple things together. In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into much larger ones. Consolidated financial statements show the parent and the subsidiary as one single entity.

When one company owns one or more companies or is owned by another company (a parent company), generally accepted accounting principles (GAAP) requires that all financial records (from subsidiary companies) be merged or “consolidated” into a single statement for reporting purposes, usually at the end of each fiscal year.

Sage 50 accounting handles consolidation through few simple steps, but before there are some tasks that need to be done prior to consolidation:

• Make sure that all of the companies are using the same version of Sage 50 and are on the same upgrade.
• Identify the parent company.
• Identify one or more subsidiary companies.
• Ensure that each company has a unique company name and file name, and each company operates in the same fiscal year.
• Ensure that the parent company is in single user mode and all subsidiaries closed.
• Prepare the accounts for account mapping.

After all those basics verifications, you are now ready to proceed with the consolidation. For more information about consolidation, please visit article 13419.

Notes: Consolidation is only available in Premium and Quantum versions.