Currently I have a client who has multiple steps to their consolidation. Company A, B and C consolidate into Company X, which has a number of companies at that second level that roll up into Company XY. This is because all entries that get consolidated are added together (debits and credits) to become one journal entry at the date of consolidation. The audit trail for what the tool has done in a complex environment becomes pretty bad at that point, but much worse at a second level of consolidation.

Companies A, B and C all have dimensions which track which company they are coming from and allow for some visibility at Company X as to what makes up Company X's balance. That is fine for all transactions flowing through to Company X, but new transactions like residual values created through changes in FX do not have any dimension to identify them as they are system generated. What portion of my residual value is from Company A? Huge issue.

Running each business unit's consolidation on its own allows manual tracking of these changes, but for audit purposes there is no system generated report to track consolidation entries produced by the system. As alluded to above, the problem gets worse the second you add another level of consolidation. ALL residual values from lower levels, and all exchange rate adjustments get clumped together as one mess of a transaction which cannot be parsed. There are many more problems with consolidations but this is a deal breaker for anyone looking to use the consolidation tool with multiple underlying entities producing residual values and exchange rate adjustments.