What does group reporting in a Polish subsidiary include?
Group reporting involves preparing the local company’s financial data in the format required by its owner or head office. Depending on the group, it may include a profit and loss statement, balance sheet, cash flow statement, intercompany transaction schedules, tax notes, fixed assets, leases, inventories, note disclosures, comments on variances and other information required for consolidation or group management purposes.
What is a consolidation package?
A consolidation package is a standardised set of financial data and additional information submitted by a subsidiary to the team responsible for consolidation. Its structure enables the group to combine data from multiple entities, perform the necessary consolidation eliminations and prepare consolidated financial data and group reports.
Is a consolidation package the same as consolidated financial statements?
No. The package is an input prepared by an individual company. Consolidated financial statements cover the entire group and require, among other things, determining the scope of consolidation, eliminating intercompany transactions and making other consolidation adjustments at group level.
How do you prepare a consolidation package for an international group?
First, the package format, group chart of accounts or reporting categories, reporting currency, deadlines, scope of notes and required adjustments need to be agreed. The local accounting records are then mapped to the group’s requirements, data sources and controls are defined, and a recurring timetable for preparing and approving the report is established.
Can group reporting be prepared based on Polish accounting records?
Yes. In most cases, the Polish accounting records are the primary source of data. However, additional analytical accounts, account mapping, reporting adjustments, data from outside the general ledger, currency translation and reconciliation of differences between the Polish Accounting Act and the group’s accounting policies may also be required.
How do you map a Polish chart of accounts to a group chart of accounts?
Each local account is assigned to the appropriate line in the group chart of accounts or reporting package. If one local account covers several categories required by the group, additional analytical accounts or a controlled allocation method should be used. The mapping should be documented, version-controlled and applied consistently in subsequent periods.
What should be done if the local chart of accounts does not provide the data required by head office?
The first step is to identify the missing information. The analytical structure can then be expanded, the accounting treatment of selected transactions can be changed, a supporting report can be introduced or a permanent bridge between the local chart of accounts and group reporting can be created. The best solution depends on the reporting frequency and the materiality of the data.
Does TOP Outsourcing prepare reports under IFRS?
We can support the preparation of data and reporting packages in accordance with group requirements based on IFRS, as well as agreed adjustments between the Polish Accounting Act and the group standard. Responsibility for valuations, specialist judgements or areas requiring separate expert advice is agreed individually.
What are adjustments arising from differences between local and group accounting policies?
These are adjustments applied when the accounting treatment of a transaction in the local books differs from the accounting policies or reporting rules applied by the group. They may relate, among other things, to leases, provisions, impairment, fixed assets, revenue, expenses, valuation or classification of individual items.
Each adjustment should be appropriately documented, have a clearly defined basis and allow the data reported to the group to be reconciled to the company’s local profit or loss and balance sheet.
Does group reporting include intercompany reconciliations?
Yes. Reconciliation of intercompany transactions is a required part of the process. Receivables and payables, revenue and expenses, loans, interest, cash pooling and other transactions with related parties are reconciled, and differences are investigated before the consolidation is closed.
Why do differences arise in intercompany balances?
The most common causes are different timing of document recognition, payments in transit, different exchange rates, a missing document on one side, incorrect classification, offsets and interest notes. An effective process should show not only the amount of the difference, but also its cause and the person responsible for resolving it.
How is data translated into the group reporting currency?
The translation method depends on the rules adopted by the group and its reporting system. Different items may be translated using closing rates, average rates or other methods arising from group policy. The process should clearly define the source of exchange rates and the presentation of foreign exchange differences.
What data is required for a consolidation package?
Typical requirements include the trial balance, profit and loss statement, balance sheet, intercompany transactions and balances, fixed assets, taxes, leases, inventories, provisions and cash flows. The scope may also include headcount data, cost centres, business segments and comments on material changes.
Can a consolidation package include a cash flow statement and notes?
Yes. Many groups require not only a profit and loss statement and balance sheet, but also cash flow data and detailed notes, for example on fixed assets, leases, inventories, taxes, equity, provisions or related-party transactions. The exact scope depends on the specific requirements agreed with the group.
How can monthly group reporting and the close be accelerated?
The greatest improvement usually comes from organising the work before period-end: a fixed timetable, earlier reconciliations, reliable mapping, automated ERP reports, a checklist and clear responsibility for each part of the package. Manual transfer of data between multiple spreadsheets should also be reduced wherever possible.
Can group reporting be prepared directly in the client’s system?
Yes. We can work in the client’s accounting or ERP system, in the group’s reporting tool or in an agreed Excel template, provided the client grants the necessary access. The working model should define roles, access rights, approval rules and the method for archiving report versions.
What does cooperation with the group auditor involve?
It may include preparing schedules, reconciliations, balance confirmations, intercompany data, source documents, explanations of adjustments, tax calculations and responses to questions concerning items included in the reporting package. The scope depends on the group auditor’s requirements and the responsibilities assigned to the local company.
Can TOP Outsourcing implement group reporting after a company is acquired by a new investor?
Yes. Following an acquisition, the local accounting records often need to be aligned quickly with a new chart of accounts, accounting policies, closing calendar and group reporting package. We can analyse the new owner’s requirements, prepare the mapping, identify missing data and launch the first reporting cycle.
Can group reporting be combined with full accounting outsourcing?
Yes. When the same team maintains the accounting records and prepares the consolidation package, group requirements can be taken into account already at the posting stage, balances can be reconciled more quickly and the number of subsequent adjustments can be reduced. Group reporting can also be provided as a standalone service where the accounting records are maintained by the client or another provider.
When is the best time to organise group reporting?
Ideally before the first mandatory reporting cycle, a system change, a group audit, the entry of a new investor or a shortening of closing deadlines. The earlier mappings, data sources and responsibilities are defined, the fewer manual adjustments and explanations will be required in each subsequent month.
