Create a consolidation engagement

This feature is only available with products on the CaseWareCloud SE platform. Available SE products include OnPoint PCR, PBC Requests and CaseWare ReviewCompTax.

Consolidation allows you to combine several entities into one engagement file (the parent company) for the purpose of publishing consolidated financial statements.

Define a consolidation hierarchy

To consolidate an engagement file you must first define the consolidation hierarchy. This describes the relationship between a parent company and its subsidiaries. It is used to combine the financial results of subsidiaries into their parent company’s financial results.

The Consolidation Hierarchy page displays this relationship in the form of a flowchart which you can modify.

A consolidation hierarchy with four subsidiaries.

To define a consolidation hierarchy:

  1. From the engagement properties pop-up of the parent engagement file, select Consolidate.

    The Consolidation Hierarchy page displays.

    A consolidation hierarchy with a parent entity and no subsidiaries.

  2. Select Add ( ). The Add Subsidiaries page displays.

  3. Search for the entities you want to add. If necessary, modify the parent entity’s ownership percentage in the Percent Owned field. This field is used for information purposes only. Final balances are not affected.

    The Add Subsidiaries dialog.

  4. Select OK. The selected subsidiary is added to the hierarchy.

    A consolidation hierarchy with one subsidiary.

  5. Select Save.

You have defined a consolidation hierarchy. If you need to modify it, use the Consolidation icon () that now appears in the top menu.

Once you have added a subsidiary firm to the Consolidation Hierarchy page, the Consolidate button () no longer appears in the engagement properties pop-up. You can add more subsidiaries from the Consolidation Hierarchy page.

In some jurisdictions, financial reporting for the parent entity must happen separately from financial reporting for the consolidation itself.

Using the Consolidation Hierarchy page, you can link a consolidated engagement file with the parent entity engagement file using the Parent Engagement dialog. Linking the two engagement files ensures that both engagements are displayed as a single entity in the consolidation hierarchy.

The Parent Engagement dialog:

  • Only allows the selection of one engagement file

  • Filters for engagements based on the same SE product and same year-end

  • Does not show engagements that are consolidated (have subsidiaries.)

To link a consolidation engagement to another engagement file:

  1. From the Cloud menu, select Engagements.

  2. Select your consolidation engagement, then select the Consolidation icon ().

  3. From the Consolidation Hierarchy page, select the Parent Engagement icon ().

    Note: This icon does not appear if there is more than one engagement in the entity, or if the consolidated engagement already has accounts (added or imported.)

  4. From the Parent Engagement dialog, select the desired parent engagement and select OK.

    A consolidation hierarchy linked to another engagement file.

Updating a subsidiary engagement’s trial balance

You can update a subsidiary engagement's trial balance data in a consolidated engagement by bringing in any changes made in the subsidiary engagement, while keeping changes made in the consolidated engagement.

If an update to the trial balance of a subsidiary engagement file has been made since consolidating, you can apply the update using the Reconsolidate option in the hierarchy.

In the example below, changes have been made to the trial balance data for Subsidiary 1. Choose Reconsolidate to update the information in the consolidated file.

A consolidation hierarchy with one subsidiary in need of reconsolidation.

Note: The Consolidation icon () that appears in the top menu has a red dot when changes have been made in the subsidiary engagements.

To create the next period’s engagement file:

  1. Select Create Next Period’s File from More actions ().

    Creating next period’s engagement file.

  2. Complete the Carry Forward dialog as required.

  3. In the Carry forward data from field, select the engagement file with the data you want to carry forward.

    The engagement properties in the new engagement update to Current period.

  4. Accept or reject any responses, modified queries or new documents from the previous period. For more information, see Carry forward an engagement.

  5. From the Trial Balance tab, select More actions () | Reimport, and Excel or CSV to import the trial balance for the new period. Columns in the trial balance now reflect the YTD balances for the new period.

    Trial balances must be YTD (year-to-date), not period balances. After you import a trial balance, you won’t be able to change the engagement’s reporting period.

  6. From the Documents tab, select Financial Statements and scroll down to the Statement of Income.

    Notice the columns for period specific balance and YTD balances for the current and prior year.

  7. Complete the engagement in the same way you would an annual engagement.

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