Hi,

Our company just bought over a new company. In order for the new company to have the same year end as the rest of the company, this new company would have 16 fiscal period in the first year. From the second year onwards, 12 fiscal period.

We are not sure how to handle this in LN. Once the fiscal period is set, you will not be able to change the number of fiscal period for the subsequent year in the group company parameters.

However, we notice that the Reporting Periods can be changed in the Group Company Parameters.

Has anyone encounter such problem before?

Is there is solution or work around for the number of fiscal periods?

If we change the reporting periods in the company parameters, what is the effect?

Thank you

wp:rolleyes:

Hi
I had experience to did like these because my clients change the fiscal year. but I not normally solutions I used the technical skill to help too.
If you ok please letme know I will give you the solutions.
Poowanai

hi poonawi,

Yes, i would like to know what solution you proposed to your client.

Thank you.

Regards,

wp

In Baan Iv (for subsequent versions too as there is no change with this functionality) , u can have different number of reporting periods but not different year start and end . Unless reporting period nos are different from fiscal period , use of reporting period is dulication of same data with no additional benefit . Hence people turn it off in group company para .

If the acquired company opened as separate company outside the group , u can have different no of period and then consolidate financials through customer reporting.

Hi Hitest,

Thanks for the info.

We were also thinking about changing the reporting periods. For first year we will have 16 reporting periods and sebsequent years will change it to 12 reporting periods.

We are just not sure what would be the impact if we change the reporting periods to a shorter number of periods.

Regards,

wp

Hi wp,

Can you define in more detail why you think the acquired company needs a different number of periods in the fiscal year of acquisition? Are you attempting to import and report financial activity of the acquired company in the months prior to its acquisition? Otherwise, I don't see the need for 16 periods rather than 12.

Unless there is a local requirement that I'm not aware of (my experience is in the North Americas), I believe you are making this more complicated than it should be. In any case, I don't think that working with fiscal vs reporting periods solves the problem.

As I interpret the situation, you acquired a company whose fiscal year had different starting and ending dates than your company. The number of fiscal periods may have been the same as yours or different.

All of the financial activity of the new company prior to acquisition belongs to the "old" legal entity. That entity would report the year-to-date finances to government and tax authorities as a "short" fiscal year.

As of the acquisition date, your financial books should only reflect the value of the company. So you only need to record the balance sheet accounts (assets, liabilities and equity) as of acquisition date. This is normally accomplished by entering a journal voucher for the balance sheet accounts as of the acquisition date. Your fiscal books should not reflect any activity in the new company prior to acquisition. After all, you do not want to inherit P&L tax liability that belongs to the original company.

So back to my original question, can you explain in more detail why you need to have a different number of periods for the new company?

Regards,

Scott

Hi Scott,

Let me give you an example in order to explain why the 16 periods is needed.

The current group of company have a financial period from 1 May to 30 April. In Jan, they acquire a company, A and this company become the subsidiary of this group of company.

So we apply to relevant authorities to change the company A yearend to be the same as the group company. Therefore, company A would end up having 16 fiscal periods in the first year and subsequent years 12.

Hope the explaination the above clarify why different fiscal period is needed.

Regards,

wp

wp,

Thanks for the explanation. I considered giving examples with dates and thought I would just complicate matters by assuming that your company's end date was Dec 31.

Staying within standard functionality (no backdoor changes to number of periods -- which I think will lead to issues in reporting and analysis), I see two basic options if company A will be in the same financial group as your other companies.

The first option, which I alluded to in the previous reply, would be to apply to the relevant authorities to change the year end of company A to be April 30 to coincide with the other companies in your group with the first year being a "short year" from Jan-April 2009. Thus the financial activity of comany A for Jan-April would be included in your results for the fiscal year ending April 30, 2009. This may no longer be feasible for any number of reasons.

The second option, if Jan 2009 through April 2010 activity must be included in the current year, is to apply to the relevant authorities to change the end date of company A's current fiscal year to coincide with the rest of your group (April 30, 2010) but in LN define the first period of comany A's fiscal year to be Jan 1, 2009 to May 31, 2009. From the perspective of fiscal reporting, the balance sheet position and year-to-date P&L as of May 31, 2009 will compatible across the group although you may need or want to do some custom reporting or analysis on the monthly results through the end of May.

Under option 2, if reporting periods (12?) are implemented in your current financial group but not actually being used (redunctant information as Hitesh said), you can define reporting periods 1-5 as calendar periods Jan, Feb, Mar, Apr and May. Because you are not using reporting periods for any other analysis in the existing companies, you can arbitrarily set start/end dates for the remaining periods so that all remaining fiscal year activity fits within the 12 reporting periods specified in Group Company parameters.

Finally, as Hitesh said if the new company does not need to belong to the same financial group, you can easily define 12 fiscal periods to match the end dates of the current group and 16 reporting periods to match calendar dates. But in subsequent years I think you will need to define reporting periods 1-5 to ultimately end on May 31. (I haven't tested the ability to change the number of reporting periods once financial transactions have been recorded. It wasn't possible in the Baan IV environments I've worked in. I'm surprised that my LN test system permitted me to change the number of reporting periods in the company parameters but did not try to process any transactions.)

Keep us posted on your test and decision as this is not a totally uncommon situation.

Scott

wp,
The first option, which I alluded to in the previous reply, would be to apply to the relevant authorities to change the year end of company A to be April 30 to coincide with the other companies in your group with the first year being a "short year" from Jan-April 2009. Thus the financial activity of comany A for Jan-April would be included in your results for the fiscal year ending April 30, 2009. This may no longer be feasible for any number of reasons.

The second option, if Jan 2009 through April 2010 activity must be included in the current year, is to apply to the relevant authorities to change the end date of company A's current fiscal year to coincide with the rest of your group (April 30, 2010) but in LN define the first period of comany A's fiscal year to be Jan 1, 2009 to May 31, 2009. From the perspective of fiscal reporting, the balance sheet position and year-to-date P&L as of May 31, 2009 will compatible across the group although you may need or want to do some custom reporting or analysis on the monthly results through the end of May.

Under option 2, if reporting periods (12?) are implemented in your current financial group but not actually being used (redunctant information as Hitesh said), you can define reporting periods 1-5 as calendar periods Jan, Feb, Mar, Apr and May. Because you are not using reporting periods for any other analysis in the existing companies, you can arbitrarily set start/end dates for the remaining periods so that all remaining fiscal year activity fits within the 12 reporting periods specified in Group Company parameters.

Finally, as Hitesh said if the new company does not need to belong to the same financial group, you can easily define 12 fiscal periods to match the end dates of the current group and 16 reporting periods to match calendar dates. But in subsequent years I think you will need to define reporting periods 1-5 to ultimately end on May 31. (I haven't tested the ability to change the number of reporting periods once financial transactions have been recorded. It wasn't possible in the Baan IV environments I've worked in. I'm surprised that my LN test system permitted me to change the number of reporting periods in the company parameters but did not try to process any transactions.)

Keep us posted on your test and decision as this is not a totally uncommon situation.

Scott

Option 1 recommended by scott , if possible , is best .

In option 2 baan will not allow different year start / end date for fiscal/reporting period for companies within group . If companies are in separate group that it may be possible to have first year of 16 month and subsequently change the year to 12 month period . But still consolidation will be a problem (bcos period 1 of group company does not match period 1 of acquired company) .

Best thing probably (which we had done when our company name changed and year was split in 2 parts ) could be to create trial balance report to permanent report (say 16 month trial balance 2009) which opens only for certain company and certain year and which reports TB figures across 2 year (4 month and 12 month combined ) .

We do similar thing even for regular govt reporting and our calender year reporting (both ending on different dates)