Solution

This use case solution follows these general steps at a high level:

1. P&L Data Extraction from Source Systemsextract the P&L trial balances or detailed P&L account activity for the reporting period.
2. Chart of Accounts (CoA) MappingUtilizes a predefined mapping table within respective applications to translate local P&L account codes to the group's standardized chart of accounts.
3. Currency TranslationRetrieves period-average and closing exchange rates from an internal Treasury System or the ERP System
4. Intercompany Revenue/Expense Identification & EliminationIdentifies intercompany transactions impacting P&L accounts (e.g., intercompany sales, cost of goods sold on intercompany sales, intercompany service fees, interest income/expense) based on predefined trading partner details and specific intercompany accounts
5. Consolidated P&L Generation & Validationa) Generates a draft consolidated P&L statement, including subtotals (e.g., Gross Profit, Operating Income, Net Income). b) Performs validation checks, such as comparing consolidated totals to the sum of individual entity submissions (pre-elimination), checking for large unexplained variances compared to budget or prior periods, and ensuring eliminations balance.
6. ReportingPrepares summary reports, variance analyses (Actual vs. Budget, Actual vs. Prior Year)