How to add consolidation adjustments

Post group-level adjustments such as goodwill, intercompany ownership, and other entries that sit outside the operating subsidiaries.

When to use this

Use this when you need to post adjustments outside your operating entities - entries that do not belong in any individual subsidiary but must appear in consolidated reporting.

Common examples under IFRS and US GAAP include:

Goodwill
Fair value adjustments at acquisition
Acquisition equity elimination
Group accounting policy alignment
Non-controlling interest (NCI / minority interest)
Equity method adjustments (associates and joint ventures)
Foreign currency translation (CTA)
Deferred tax on consolidation adjustments

In ScaleXP, these are handled through a dedicated adjustment entity (e.g. "Consolidation Adjustments"), which sits alongside your subsidiaries and flows automatically into group reporting.

What ScaleXP already handles for you - No adjustment entity needed

Before creating an adjustment entity, note that several consolidation processes are already automated:

Intercompany eliminations (revenue, costs, balances) are handled via the eliminations feature
FX differences from eliminations are calculated automatically and appear in consolidated reports
Equity FX adjustments (e.g. historic rates) are managed via Load Data → Equity Adjustments, with automatic balancing into Total Equity

Only create an adjustment entity for items not covered above.

Step 1. Set up the adjustment entity

Create the entity and link it to your group in one go:

Click the entity dropdown at the top right of any page and choose Add new entity.
Under What are you adding? choose Subsidiary in an existing group.
Enter a Subsidiary name (for example "Consolidation Adjustments" or "Group Adjustments"), a Currency (typically your group reporting currency) and a Subsidiary short ID (for example "ADJ").
Under Group it's joining, select your consolidated organization.
Click Save and continue. The Connect your data step opens, ready for Step 2.

The adjustment entity is now part of your consolidated organization and appears beneath the parent in the entity dropdown. For screenshots of each screen, see How to add a new entity in ScaleXP.

Step 2. Add your adjustments

You can populate the entity in two ways:

Option A - Trial balance sheet (recommended)

On the Connect your data step, click Connect next to the adjustment entity.
Select Trial balance sheet.
Connect to Google Sheets or Excel. For the template and sync steps, see How to add a subsidiary without including an accounting connection.

In the trial balance:

Add one row per adjustment account
Assign each to the correct category (Revenue, Costs, Assets, Liabilities, Equity, etc.)
Each adjustment appears as a normal account in reporting

Why this is recommended:

Faster to set up
Easier to maintain
No external journal posting required

Option B - Accounting system (alternative)

Create a separate entity in your accounting system (e.g. Xero, QuickBooks, Zoho Books) and post journals there. Then, on the Connect your data step, click Connect next to the adjustment entity and choose your accounting system.

Use this only if you need:

A single accounting source of truth
Specific audit workflows tied to your ledger

This approach is more complex to maintain.

Step 3. Map accounts in your reports

Once data is loaded:

Go to your consolidated P&L and Balance Sheet configuration
Map each adjustment account to the correct:
Category
Group
Sub-group

To keep structures consistent across entities, use Cascade from Parent.

Step 4. View your consolidated reporting

Your adjustments are now included in your group reporting.

Select your parent organization to access:

Consolidated P&L, Balance Sheet, and Cash Flow
Dashboards and KPIs
Charts and graphs for reporting
Presentations built from live data

You can use these outputs as-is or customize them further depending on your reporting needs.