Multi-Entity & Consolidated Reporting

Some clients are a single company. Others are a group: a parent entity with subsidiaries, each with its own books, currency, and intercompany activity. This page explains how entities work across the workspace, how to run reports for one entity or a chosen set of entities, and how currency is handled when a group spans more than one.

To record a client's entity structure — adding or attaching entities, setting each one's relationship (subsidiary, branch/division, or affiliate/investment), ownership %, and effective dates — see Working with Multiple Entities. That guide also covers confirming which entity's books a connected bank account belongs to. For close-time consolidation mechanics (elimination matching, ownership methods, tolerances), see Multi-Entity & Intercompany.

What an entity is

An entity is one company within a client — one set of books in the connected accounting system. Every entity carries:

• A display name and abbreviation
• Its functional currency (the currency its books are kept in)
• Its place in the group: parent (group) entity or subsidiary, with an ownership percentage
• Intercompany accounts, if it transacts with sibling entities
• A lifecycle status (active, archived, suspended, or dissolved)

Single-entity clients never see entity controls — everything runs against the one company. Multi-entity clients see the entity selector wherever scope matters.

Selecting an entity

The entity selector appears in the workspace header and on accounting, close, and reports screens for multi-entity clients. It shows each entity's name, currency, status, and whether it is the primary entity; recently used entities appear as shortcuts.

• Selecting an entity scopes reports, transactions, and close work to that entity's books.
• The selection is remembered per client, so switching clients never carries the wrong entity across.
• Entities that are archived or unavailable in the accounting backend are visible but cannot be selected for posting.

The AI assistant follows the same scope: ask for "the trial balance" and it runs against your selected entity; name another entity or say "consolidated" and it switches scope explicitly rather than guessing.

Standalone vs consolidated reports

Multi-entity clients get both views:

• Standalone reports — any report (P&L, balance sheet, trial balance, ledger, aging) run for one entity via the entity selector. Amounts are in that entity's functional currency.
• Entity comparison — a side-by-side P&L with one column per entity and a total column, for spotting where results come from before consolidating.
• Consolidated reports — the Consolidated P&L, Consolidated Balance Sheet, and Consolidated Trial Balance combine entities, apply intercompany eliminations, and flag anything a reviewer should check before relying on the totals.

Consolidated reports ignore the single-entity selector — they run at group scope and say so on screen.

Choosing which entities consolidate

By default a consolidated report includes all active entities. On the Consolidated Trial Balance, the Consolidation scope panel lets you narrow that to a chosen set — for example a regional sub-group or one operating pair — without touching entity setup. The Consolidated P&L and Balance Sheet always consolidate the full group tree; the panel says so on those tabs, and the presentation-currency picker still applies to them.

Two rules keep partial consolidations honest:

• Intercompany balances with entities outside the selection are treated as external balances and are not eliminated. The report says so in its review guidance.
• If a selected entity can't be included (for example it isn't mapped to a company in the accounting backend), the report lists it as skipped instead of silently shrinking the total.

Ownership still applies within the selection: subsidiaries under 20% ownership are excluded (cost method), 20–49% appear as a single equity-method line, and majority-owned entities consolidate in full with a non-controlling-interest line where ownership is below 100%.

Currency: where it's set and how consolidation handles it

Each entity keeps its books in its own functional currency, set when the entity is created and synced from the accounting backend. Standalone reports always present that currency.

When a group spans currencies, consolidated reports translate every entity into one presentation currency:

• The default presentation currency is the parent entity's currency.
• The Consolidation scope panel lets you present in a different currency — for example a EUR-parented group presented in USD for a US lender.
• Translation uses the exchange rates maintained in the accounting backend (daily rates or the automatic rate service). Kraal never invents a rate.
• Intercompany eliminations are matched and displayed in the same presentation currency, so elimination columns line up with statement rows.

If a rate is missing, the affected entity's amounts stay untranslated and the report is flagged for review with the exact currencies that need rates — add the missing exchange rate and re-run. A consolidated report never mixes currencies silently.

Financial packages follow the same rules: a mixed-currency group's consolidated pack is built and labeled in the parent's currency, and each entity's drill-down sub-pack is translated into that same currency so the columns tie. For statements in an entity's own functional currency, run a standalone pack for that entity.

Intercompany in day-to-day work

Intercompany activity between entities is recorded with linked journal entries — one in each entity, cross-referenced so both sides stay in sync. Run intercompany setup on the client to create the intercompany receivable/payable accounts and internal counterparties each entity needs.

At reporting time, Kraal pairs intercompany balances across entities and eliminates them from consolidated totals. Unmatched balances appear as imbalances with the difference amount so they can be fixed before the period is issued. Details, matching modes, and tolerances are covered in Multi-Entity & Intercompany.

Review signals on consolidated reports

Every consolidated report carries a launch-readiness banner:

• Launch-ready — all eligible entities included, eliminations clean, no missing rates. Normal review still applies.
• Review required — the report lists exactly why: skipped entities, intercompany imbalances, missing exchange rates, ownership treatments that need statement-level handling, or a deliberately partial entity selection.

Treat the banner as the gate: don't issue a consolidated report externally while it lists unresolved items.