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Consolidations

Consolidate 1120 or 1120S returns

During the consolidation process, the application consolidates the locators, processes eliminations, and calculates and applies automatic adjustments (for example: capital loss or contribution deduction limitations). Processing time varies, depending upon the size and complexity of the locators included in the consolidation.
Before you start the consolidation process, the individual company locators need to be prepared and fully recomputed by selecting
Compute
, then
Full Recompute
. If any member of the consolidation is currently computing at the tax server or has computations pending, you'll need to wait for it to finish. If you select to consolidate using cross-ties and you haven't set up each locator for this feature, you won't get whitepaper detail for the income statement and the balance sheet.
Each company locator included in the consolidation process resides in a separate, computed locator. 2 more locators are set up after consolidation:
  • The consolidation locator, where the transferred numbers reside.
  • An eliminations company locator, which contains the eliminating entries for the consolidation that need to be balanced.
We recommend that you do the following to have a successful consolidation.
  • Don't enter data directly on the consolidation locator (except for required consolidated data and consolidated overrides). When you re-consolidate the return, the data is replaced unless you locked in overrides. Overrides cause the detail schedules to show adjustments too.
  • Keep the level of detail consistent for each company in the consolidation group. If you aren't consistent, the totals on the supporting detail statements won't match the 1120 return amounts.
  • Enter data for consolidated returns at the lowest level of detail in the Organizer on all locators.
note
Locators that belong to an 1120C consolidation and locators that belong to an 1120-REIT consolidation are mutually exclusive and can't be interchanged.
  1. Enter the company locator that will be the top consolidation return.
  2. In the Organizer, go to the
    Consolidated Returns
     folder, select
    Step 1 - What to Consolidate
    , and then go to the
    Consolidated Return List
    .
  3. Enter the
    parent corporation
     and
    eliminations
    returns. If the account numbers are different, enter those too.
    1. You'll need an elimination return even if there are no elimination entries. The elimination return only contains adjustments to income and expense amounts, balance sheet items, and Schedule M1/M2 items. We add these adjustments to the combined return totals to calculate the consolidated amounts.
    2. Enter amounts as positives.
    3. Enter amounts to subtract as negatives.
  4. Enter the following information for each subsidiary and division:
    • The company number to process Form 851.
    • The return number.
    • The company name.
    • The account number (if different).
  5. Select
    Subsidiary List Complete
    .
  6. Close and re-enter the locator. Select
    Yes
     when asked
    Do you wish to make all subsidiaries available for compute?
  7. Make sure all subsidiaries are restored (they'll say
    Successful
     near the locator number).
    note
    If any subsidiary has a message other than
    Successful
     (that is, no active or archive data exists), don't consolidate the return. Restore or check in the missing returns and make them available for consolidation before continuing.
  8. Select
    Step 1 - What to Consolidate
    , and then go to the
    Select the Federal Forms to Consolidate
     tab to view the Consolidated Federal Forms screen.
  9. You can leave the
    X
     on
    Consolidate all federal forms
     or remove the
    X
     and then select the forms to consolidate.
  10. Go to
    Step 1 - What to Consolidate
     and then the
    States to Combine/Consolidate
     tab. Select
    State and City Activation/Consolidation
    . Select the states to combine and consolidate and make any changes as needed.
  11. Select the
    Inactive State Activation
     tab and make changes as needed.
  12. Go to
    Step 2- Enter Consolidated Overrides
     and then select
    1120 Pg 1-6
    . Review the screens for overriding specific federal amounts created by the consolidating returns. Make changes as needed on each of the following pages:
    1. Special deductions, Schedule J, 1120 Consolidated NOL, Tax Accruals, Other forms (3468, 4255, 4626 Overrides, 4797, 8810, AMT Consolidation NOL and Financial Institution Bad Debt.
  13. Go to
    Step 4 - Review Preconsolidation Checklist
    . Select
    Preconsolidation Utilities
     to review out of balance items, compute pending subsidiaries, and review inconsistencies in the level of detail.
  14. Go to
    Step 5 - Consolidate!
     and select
    Consolidate
    .
  15. Go to
    Step 6 - Review Cross-Tie Information
     and select
    Cross-tie information
    . Review the diagnostics.

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