When working with balance sheets in Calxa, users may occasionally encounter discrepancies in the equity section. These differences often result from specific settings or configurations within the application, such as year-end settings in group consolidations or cashflow settings in manual organisations. This article outlines common causes and provides guidance on resolving these issues.
Equity Discrepancies in a consolidated Group
In group consolidations, the equity section of a consolidated balance sheet may differ from the sum of each individual company's equity due to the handling of year-end settings. Here's how this works:
Year-End Settings: Calxa uses the year-end date specified for the consolidated group when preparing group financials. If individual companies within the group have different financial year-ends, their current earnings may be attributed to retained earnings based on the consolidated group’s year-end settings rather than their own.
For example, if one company has a financial year ending in December and another ends in February, Calxa will consolidate the financials according to the group’s defined year-end. This can result in figures in the equity section that do not match the direct sum of the individual companies’ equity. Ensure that the group’s year-end settings align with your reporting needs.
Current Year Earnings figure does not represent Net Income
In balance sheet forecasts for manual organisations, net income might incorrectly appear under share capital instead of as current year earnings. This usually occurs because of issues with the cashflow settings for the organisation.
Review the Cashflow Settings: The share capital account may inadvertently be selected as the account for current year earnings, especially if the proper Current Year Earnings account has been deleted or not created.
This situation can arise if the base chart of accounts that includes the Current Year Earnings account is replaced (e.g., during an import from another system). When this happens, the cashflow settings may default to using another account such as share capital. To resolve this:
Recreate the Current Year Earnings account in your manual organisation chart of accounts.
Update the cashflow settings to correctly nominate the Current Year Earnings account.