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Accounting for separate business units

  • 17-06-2013 8:22pm
    #1
    patg
    Registered Users, Registered Users 2 Posts: 157 ✭✭


    I'd be grateful for any light thrown on how to account separately for separate business units within one entity.

    Can they be accounted for actually as separate and distinct units and then consolidated for management/annual accounting?

    Also - assuming a business is using good standard accounting software - how much of the consolidation is done automatically - and how much is manually worked out by the accountant?

    Thanks in advance.


Comments

  • #2
    Sleepy
    Registered Users, Registered Users 2 Posts: 24,367 ✭✭✭✭Sleepy


    Depends on the accounting software you're using but typically this would be done by posting the Business Unit as a posting attribute against each transaction you enter. It's absolutely standard stuff for financial software.

    (source: as a BI consultant, reporting on these transactions e.g. P&L by Business Unit has been part of my job for nearly a decade)


  • #3
    patg
    Registered Users, Registered Users 2 Posts: 157 ✭✭patg


    Hey Sleepy - thanks for your reply.
    I was worried my post was fallen into the abyss...

    So - once a transaction has been posted and "tagged" as Business Unit 1/ Business Unit 2 .... does that mean you can then produce financial statements for (I) each business unit separate; and then (II) consolidated as the formal company statement?

    Thanks


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