A multi-entity closing fails in the gaps between entities, not inside them. Each subsidiary can close cleanly on its own books and the consolidated position still refuse to balance, because the mismatch lives in what the entities owe each other.

Intercompany reconciliation deserves to be the first step, not the last. Matching balances entity by entity before consolidation turns a late, opaque discrepancy into an early, attributable one. When the two sides of an intercompany position disagree, the question is which entity's cut-off moved, and that is answerable while the closing is still open.

FX exposure compounds the problem in any group with entities outside the reporting currency. The translation difference is arithmetic; the judgement is in the rate used, the date applied and whether hedging is designated. Those three choices should be written down at the moment they are made, not reconstructed from the result.

The control points that actually matter are few: cut-off consistency across entities, intercompany elimination completeness, FX rate provenance, and the approval chain on any manual adjustment. A closing that can evidence those four holds up. One that cannot will consume weeks proving it afterwards.

Methodology

Reconcile intercompany balances before consolidating, not after
Record the FX rate, its source and its date alongside every translated position
Route every manual adjustment through a named approver
Keep entity-level cut-off dates aligned and documented

Key Takeaways

1.Multi-entity closings break between entities, not inside them
2.An early discrepancy is attributable; a late one is archaeology
3.FX judgement should be recorded when made, not inferred later
4.Manual adjustments are where audit attention concentrates