Contents

Introduction

This article details why a consolidated group's balance sheet may not be in balance. Both single-currency consolidations and multi-currency consolidations are covered in this article.

To skip to to the multi-currency consolidated balance sheet section of this article, please click here.

For single company entities, please see 'Why is my company's balance sheet not balancing?'.

Single-currency Consolidated Groups

To resolve an unbalanced consolidated balance sheet, we recommend viewing the Excel report called ‘Consolidated financials, including eliminations’ in the view with the highest level of detail for your group.

You can access this report by:

Going to the 'Reports' for the consolidated group
Selecting 'Excel reports' from the left side menu
Downloading the 'Consolidated financials, including eliminations' report

Step 1: Check the balance for each company in the consolidated group.

Is each company in balance?

✅ Yes, it is. Good! Please go to Step 2 in this article.

❌ No, it is not. If the balance sheet for a company is not in balance, it may be necessary to investigate the financial statements for the specific company.

You’ll want to make sure that each underlying company is in balance in your source accounting system or Excel financials upload and that this data has been updated in Fathom. After checking that the company is in balance in your source system,
1️⃣ Update each underlying company in Fathom in ‘Step 1 - Update Data’ of the individual company’s Settings.
2️⃣ Then, update the consolidated group in ‘Step 1 - Update Data’ for the consolidated group.

For underlying companies that are out of balance, review the chart of accounts for the individual company in Fathom to ensure accounts on the balance sheet are classified correctly. You can review the classification of accounts for a company in ‘Step 3 - Chart of Accounts’ in the company’s Settings.

❗Note: If you reclassify any accounts in the underlying companies, you’ll need to update the consolidated group in ‘Step 1 - Update Data’ to ensure these changes are carried into the consolidated group.

Step 2: Check the balance of the consolidated group, both before and after eliminations.

Is the group in balance before eliminations have been applied?

✅ Yes, it is. Good, move onto the next question.

❌ No, it is not. This suggests that the underlying companies are not in balance. Please refer to Step 1 in this article.

Is the group in balance after eliminations have been applied?

✅ Yes, it is. Great! The consolidated group’s balance sheet is in balance.

❌ No, it is not. It will be necessary to review the eliminations that have been applied to ensure the eliminations themselves are balanced eliminations.

To learn more about using eliminations in consolidated groups, please see our 'Eliminations in a Consolidated Group' article.

Did this not resolve the issue? Feel free to contact our support team using the support chat option or via email at support@fathomhq.com. Please include a copy of the ‘Consolidated financials, including eliminations’ Excel Report in your chat message or email.

Multi-currency Consolidated Groups

To resolve an unbalanced consolidated balance sheet, we recommend viewing the Excel report called ‘Multi-currency consolidated financials, including eliminations’ in the view with the highest level of detail.

You can access this report by:

Going to 'Reports' for the consolidated group
Selecting 'Excel reports' from the left side menu
Downloading the 'Multi-currency consolidated financials, including eliminations' report

This report will be referred to in 'Step 2' of the workflow outlined below.

Go to the 'Analysis' section for each underlying company in the consolidated group and check the balance sheet in the 'Financials' tool.

Step 1: Check the balance for each underlying company in the consolidated group.

Is the underlying company in balance before exchange rate translation?

✅ Yes, it is. Good! Then the balance sheet accounts (prior to eliminations) will be in balance after translation because every account on the Balance Sheet is translated using the same exchange rate. You can move on to Step 2 in this article.

To learn more about exchange rates applied and our multi-currency consolidation methodology, please see this article.

❌ No, it is not. If the balance sheet for an underlying company is not in balance, it may be necessary to investigate the financial statements for the specific company.

You’ll want to make sure that each underlying company is in balance in your source accounting system and that this data has been updated in Fathom. To update the consolidated group,
1️⃣ Update each individual company in Fathom in ‘Step 1 - Update Data’ of the company’s Settings.
2️⃣ Then, update the consolidated group in ‘Step 1 - Update Data’ for the consolidated group.

For underlying companies that are out of balance, review the chart of accounts for the individual company in Fathom to ensure accounts on the balance sheet are classified correctly. You can review the classification of accounts for a company in ‘Step 3 - Chart of Accounts’ in the company’s Settings.

❗Note: If you reclassify any accounts in the individual companies, you’ll need to update the consolidated group in ‘Step 1 - Update Data’ to ensure these changes are carried into the consolidated group.

Now you can refer to the ‘Multi-currency consolidated financials, including eliminations’ Excel report you downloaded for the consolidation.

Step 2: Check the balance of the consolidated group before and after eliminations.

Is the group in balance before eliminations have been applied?

✅ Yes, it is. Good, you can move on to the next question.

❌ No, it is not. This suggests that the underlying companies are not in balance. Please refer to Step 1 in this article.

Is the group in balance after eliminations have been applied?

✅ Yes, it is. Great! The consolidated group’s balance sheet is in balance.

❌ No, it is not. It will be necessary to review the eliminations that have been applied. Also, see the 💡Pro Tip below.

💡Pro Tip: The group may be out of balance after eliminations because the exchange rate applied at the time of transaction differs from the period-end exchange rate applied in Fathom. To account for this, we recommend posting an elimination against the eliminated accounts to get things back in balance. You can do this through an Eliminations Company.

To learn more about using Eliminations Companies in Fathom, see our 'Eliminations in a Consolidated Group' article.

To learn more about our multi-currency consolidation methodology and how exchange rates are applied, see this article.

Did this not resolve the issue? Feel free to contact our support team using the support chat option or via email at support@fathomhq.com. Please include a copy of the ‘Multi-currency consolidated financials, including eliminations’ Excel Report in your chat message or email.