Next Generation Financial Consolidations 4
The Challenges of Consolidation Today
Consolidations have been a routine part of many corporate accounting departments for as long as
most can remember� What has changed over time is the complexity and compressed timelines of
consolidations�
Consolidation complexity is driven by factors such as:
• Geographic growth of subsidiaries across states, regions,
and around the world with the advent of globalization.
• The varying and changing nature of accounting rules in
different jurisdictions.
• Emphasis on growing the business through both organic
new ventures or by acquiring others.
• Increasing inter-relationships and inter-company activities
between entities within a control group�
• The international mix of business activities giving rise to
translation of foreign currency denominated transactions,
balances, and operations.
The timelines for consolidation are compressing and are driven
by factors such as:
• Tightening reporting deadlines and the desire to improve the
timeliness of reporting with financial stakeholders.
• Transparency of relevant information about the business to the
financial stakeholders.
• The need for a well documented and well controlled
consolidation process that preserves and enhances financial
reporting integrity�
These factors conspire to make the consolidation process ever
more challenging for many corporate accounting functions�
