From XU Magazine, 
Issue 30

Consolidated Financial Reports in Google Sheets by G-Accon

That is Financial Consolidation Reporting in the Accounting World?

Consolidate comes from the Latin roots com- (“together”) and solidare (“to make solid”). Combining these roots, we discover that to consolidate means to bring pieces together to make something stronger or easier to handle. In the context of financial accounting, this term “consolidate” refers to the integration of financial data from several subsidiaries or business entities within an organization into one report. This final product can then be used by a parent company for reporting purposes. Financial consolidation is a well-defined process that includes several factors and accounting principles. In financial accounting, consolidated financial reports or statements provide a comprehensive view of the financial position of both the parent company and its subsidiaries, rather than one sole company’s position.

Key financial reports that are generated by consolidating financial statements that include the income statement (profit and loss), balance sheet, and statement of cash flows.

What is the importance of Consolidated Financial Reports?

There are quite a few reasons why financial consolidation is so essential for running a business in today’s day and age. 

Primarily, the consolidation reports help you to understand each subsidiary’s or business entity’s overall performances.

The consolidation reports, generated monthly, are great for keeping companies on track with forecasts and their budgets.

Consolidated statements or reports allow investors, financial analysts, business owners, and other interested parties to get a complete overview of the parent company. From just a quick glance, they can view the overall health of a business and how each subsidiary or department impacts the parent company.

One small but impactful benefit of consolidated reports is that the transactions among subsidiaries and the parent company are eliminated to avoid double counting.

Using modern technology, you can eliminate all old-school paperwork. Let’s say, for instance, that the parent company owns 10 subsidiaries and that there will be 44 separate stand-alone financial reports to view (the four basic financial statements for each subsidiary plus the parent company). As you can imagine, not only would it be hard to track down all these records, but it would also be extremely difficult and time-consuming to look over each of them to try to get an overall view of how the business is performing. In this scenario, consolidating reduces the amount of reports from 44 to 4.  At the end of the day, this results in less paperwork and less effort being expended to assess a parent company’s financial health.

Fast and reliable information is vital in a world where technology is accelerating the growth of most industries.

Global organizations need reports that can be broken down in order for regional and local regulators to be able to prove compliance.

If we look at the sheer number of transactions that happen throughout the month, we can see that the ones between subsidiaries and the parent company cancel each other out. Eliminating these transactions gives a simplified view of business performance.

Finally, over time, consolidated financial statements will continue to evolve to make the process of evaluating a parent company even more transparent. One of the reasons for this is that in the past, some companies have used consolidated reports to hide losses and liabilities in special subsidiaries that were created specifically for hiding these financial problems. The Financial Accounting Standards Board and the International Accounting Standards Board regularly revisit the definitions and requirements for consolidated statements in order to make them more reliable and easier to use.

How can G-Accon help you with creating your consolidation report?

Financial Consolidation is more than just adding up numbers. For those who aren’t familiar, financial consolidation might just sound like simple addition —but it’s actually a lot more complicated than that. In financial consolidation, there are specific calculations, formulas, and consolidation adjustments that need to be made as numbers are combined from the parent company and its subentities. This includes the following:

  • Foreign currency translation
  • Elimination of intercompany transactions and balances
  • Adjusting journal entries

To start the consolidation report, you need to select G-Accon for Xero, then the Consolidated Report menu option. You need to have at least two Xero organizations to be able to generate the consolidated report. Your next step is to select all entities for which you will be generating consolidated reports (Fig. 1).

Fig. 1

Then you have to select the desired financial report such as Profit and Loss (Income Statement), Balance Sheet, or Cash Summary from the drop down filter (Fig. 2).

Fig. 2


As you can see from the organization selection dropdown box, we have two Xero entities –– AU and a US base. Let’s assume we need to generate the consolidated report in AU currency based on the January 19, 2022  currency exchange rate.

Your next action would be to select a Multi-Currency Converter.

You have multiple options here. First of all, you need to choose the report currency. We have chosen “AU” currency. Then by clicking on the radio buttons “Use Latest Exchange Rate” or “Use Custom Exchange Rates”, you can either request the current exchange rate from the currency exchange rate provider or set your own custom exchange rates (Fig. 3).


If you select “Use Latest Exchange Rate” and click on the “Execute” button, the consolidation report will be generated based on the latest available exchange rate from the exchange rate provider. Everytime you refresh this report, the latest exchange rate will be used.Your next option is to set up the custom exchange rate. First, you need to select “Use Custom Exchange Rates”, enter the desired date, and make a decision to either obtain the exchange rate directly from the exchange rate provider or generate a separate tab with exchange rates for multiple currencies. This additional feature allows you to manually modify any exchange rate values and use them in the report generating process (Fig. 4).


Finally, you can generate the consolidated report by clicking on the “Execute” button (Fig. 5).

In a very similar way, you can generate Profit and Loss (Income Statement) and Cash Summary consolidated reports. 

For businesses with multiple departments or parent companies with multiple entities, there are several advantages to this financial consolidation. There are 3 reasons why your company stands to benefit:

1) Performance At-a-Glance. For executives, managers, investors, analysts, and business owners, financial consolidation is the best way to easily see a snapshot of a company’s performance. This consolidated financial report gives stakeholders invaluable insight into the parent company’s overall health. Without consolidation, employees would need to spend hours sifting through individual financial reports. 

2) Strategy. With financial reports flying in from multiple entities, figuring out your company’s overall direction can feel a bit daunting. Financial consolidation gives your leadership the clear insight they need in order to plan more effectively.

3) Efficiency. Combining multiple reports into a single consolidated financial statement creates more time for important tasks such as strategic planning. Better yet, real-time consolidation from our G-Accon product accelerates the financial closing rate and streamlines your intercompany eliminations. The small-size to enterprise-level companies that G-Accon works with frequently report that this real-time consolidation through G-Accon ends up saving them days in the closing process.

Why leave it there?

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