Statutory reporting for International companies (Additional Chart of Accounts)

On my international implementations, I have come across subsidiaries struggling with statutory reporting. Specifically, countries that require a separate chart of account (main accounts) than what has been configured in AX across all companies. A specific scenario that I have dealt with was for a subsidiary in Spain needing to comply with a Spanish National Chart of Accounts. The Spanish subsidiary annually provided the government with a Trial Balance and a Ledger journal (Spanish Account Book) using the Spanish National Char of Accounts. I have found a few cool pieces of functionality in Dynamics that would help many subsidiaries with their statutory reporting requirement. I’ll walk through the pieces of functionality that would help with statutory reporting and the actual setup required. Here is what we will look at: 1) Maintaining a Statutory Chart of Accounts 2) Printing a Trial Balance with Statutory Accounts 3) Printing the Ledger Journal List with Statutory Accounts. To do this, the following three tasks will be completed (1) Consolidation account group (2) Additional consolidation accounts in accordance with the Statutory Spanish GAAP requirements (3) Spanish consolidation company with Statutory Spanish GAAP accounts.

Maintaining A Statutory Chart of Accounts

Let’s say the Spanish government gave you a chart of accounts to use and you need to map it to the existing ledger accounts in Dynamics 365. To map the Spanish account numbers to the shared Chart of Accounts you will first create a Consolidation account group that will represent the collection of the Spanish statutory chart of accounts. Path: General Ledger–>Setup–>Consolidation Account Groups. As seen below, a single Spanish consolidation account group is created and will be used to associate with individual Spanish accounts.

Consolidation account groups

To perform the actual mapping of the Spanish statutory accounts to your existing ledger accounts you will then use the Additional consolidation accounts form. Additionally, the Consolidation account group noted above will be used to identify the collection of the Spanish statutory accounts. Path: General Ledger–>Setup–>Chat of accounts–>Additional consolidation accounts. Create and Map Spanish statutory accounts as seen in the example below. The mapping performed in the Additional consolidation accounts form needs to satisfy the mandated local government reporting needs, as such, take into consideration the government requirements on the types of transactions that roll-up to the statutory accounts.

Additional consolidation accounts form

Create a Consolidation Company

After you have mapped all of your accounts to the statutory reporting accounts you will then create a new consolidation company with the statutory chart of accounts and you will then perform the consolidation using your mapping. In the consolidation process the ledger transactions and balances will be transported to the Spanish consolidation company for Statutory reporting purposes. This process will help you generate the Trial Balance and the Ledger Journal List with Statutory Accounts. Path: Organization administration–> Organizations–> Legal entities. Using the Legal entities form create a new legal entity that will be the Spanish consolidation legal entity. Insure you fill-out the applicable Country/region (ex. ESP Spain) as the country specified herein drives localized functionality. Additionally, as this is a consolidation entity in the General Section select the “Use for financial consolidation process check box” check box which will enable the consolidation functionality.

Spanish consolidation company

As part of the Statutory consolidation company setup in AX 2012 the ledger form needs to be setup for appropriate use of chart of accounts, currency and fiscal calendar. As part of this process please create a new chart of accounts with statutory accounts needed for your government reporting.

Setup the ledger

Path: General ledger –> Ledger Setup –> Ledger. When setting up the form select the applicable chart of accounts (ex. Spanish Chart of Accounts), the fiscal calendar (ex. Fiscal), the accounting currency (ex. EUR), a reporting currency (EUR), and the default exchange rate type (ex. Default) for the consolidated legal entity.

Ledger setup

The currency exchange rates are part of mandatory setup in AX 2012. As such, setup the appropriate exchange rates to be used in the Statutory consolidation company. Path: General ledger–> Setup –> Currency–> Currency exchange rates.

Currency exchanges rates

After the consolidation entity is set up and once the ledger transactions are posted in the Spanish legal entity, you can perform the online consolidation using the Periodic job. The consolidation process will move the transactions into the Statutory chart of accounts and will allow the finance department to generate the applicable statutory reports.

Perform consolidations

Path: Consolidations–>Consolidate (Online) Check the Use Consolidation account box to transfer transactions and balances from the main shared chard of accounts to the Spanish Statutory accounts in this consolidation entity. In the select consolidation account from you should pick the consolidation account group for Spanish subsidiary purposes as consolidation account groups were created to specify the correct mapping of GAAP accounts to the Statutory accounts. Include actual amounts check box should be checked in-order for journal entry transactions from Spanish subsidiary to come through (These will be used for Statutory reporting purposes). In the legal entity tab specify ES as the legal entity that is being consolidated. Once the Consolidation is performed the finance department can run the Statutory Spanish GAAP trial balance: Path: General Ledger–>Common–>Trial Balance. Additionally, Spain can run the periodic Journalizing job and run the Ledger journal lines report to provide to the government: a. Path: General Ledger–>Periodic–>Journals–>Journalizing. b. Path: General Ledger–>Periodic–>Journals–>Ledger journal.

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DC Admin | November 19, 2019