Balancing Subsidiaries from A to Z

These steps provide information to assist in balancing your subsidiary to the General Ledger in CBX.

• There may be other steps you need to take outside of CBX for handling investments. Follow your credit union policies and all regulatory requirements.

• Remember to always check your work after you have completed an adjustment or otherwise to ensure that what you expected to happen occurred. Most issues can be resolved more quickly if found at the point of error rather than looking through 30 days of activity.

Tips for Balancing Subsidiaries

• Set up a Subsidiary Processing Suspense account for subsidiary payment processing. This will allow for some accuracy in posting to the correct G/L’s from your payables process.

• Balance your subsidiary records prior to any adjustments or new records to ensure you are in balance prior to processing; this way you won’t be adding more to your out of balance situation. This will allow for you to pinpoint where to look for the out of balance.

• If possible, save your Subsidiary Trial Balance to PDF and subsequently convert into Excel from the last time you were in balance and compare month to month to see where your out of balance might be. If this isn’t possible, just do a side by side compare.

• Is the amount of out of balance divisible by 9, or what is the value divided by 2? If the amount is divisible by 9, there may have been a transposition. If divisible by 2, it could have been booked backwards.

1. Produce a Subsidiary Trial Balance to determine your in or out of balance.

2. Produce a G/L History report.

   • Use either Tool #649 Print G/L History (Daily) or Tool #650 Print G/L Trial Balance (Monthly).

   • Specify the period and G/L(s) to review.

3. Compare Trial Balance Totals per G/L to G/L balances to determine out of balance amount.

   • Accrued Expenses will balance to the Accrued to Date column total.

   • Fixed Assets, Building Assets, Land Assets & Leased Assets will generally have an Asset and an Accumulated Depreciation GL. Make sure you are balancing to both. Asset GL is defined as the Original Cost column total and Depreciation to Date column total is your accumulated depreciation GL. If you only use one G/L to net your asset to depreciation, you will balance to the Net Book Value column totals.

   • Prepaids will balance to the Net Book Value total column only.

   • Activity that occurred in the G/L should match the activity that occurred on the Subsidiary Record history activity.

     1. For example, if you issued a payment to a vendor for $583.20 in the G/L, then that same $583.20 subsidiary record should be created. For every entry in the G/L, there should be an entry to the subsidiary ledger.

   • The math within the history record needs to balance. If you edit a history record and do not ensure that the “resulting balance” is correct on both the history and the record with that edit, it will cause your subsidiary record to be out of balance. The record’s resulting balance is transmitted to the Trial Balance, and if it is off, your balancing to G/L will be as well.

4. Determine the imbalance reason and make the necessary entries to correct your imbalance.

   • See possible reasons for G/L imbalances below.

Reasons for Imbalance

Accrued Expenses

• An adjustment made to Accrued Expense was not correctly reflected on the Subsidiary Record.

  • Adjustments will ONLY impact the Accrued to Date field not the Total Amount to Accrue.

• Adjustment made to Accrued Expense was backwards.

  • A Debit to the Liability GL will decrease the Accrued to Date.

  • A Credit to the Liability GL will increase the Accrued to Date.

• There are items listed on Subsidiary Trial Balance that should be closed as they are fully expensed.

Fixed, Building, Land, & Leadsed Assets

• The Invoice/Total Cost on Subsidiary Record was changed with no G/L entry.

• A Debit entry was made to the G/L but no adjustment to existing or creation of a NEW Subsidiary Record.

• A Credit Memo was received and posted in the G/L for Original Invoice/Total Cost but not adjusted on the Subsidiary Record.

• The Salvage Value was included in total Depreciation to Date field.

  • Invoice/Total Cost = Depreciation to Date + Salvage Value

• The equation on the Subsidiary Record doesn’t balance.

  • Invoice/Total Cost – (Depreciation to Date + Salvage Value) = Net Book Value

Prepaid Expenses

• A Debit adjustment to Invoice/Cost will increase your value. Check the record to ensure the adjustment was processed as expected.

• A Credit adjustment to Amortization to Date will decrease your value. Check the record to ensure the adjustment was processed as expected.

• The equation on the Subsidiary Record doesn’t balance.

  • Invoice/Total Cost – Depreciation to Date = Net Book Value

Learn More

	What should I consider while processing subsidiaries/investments?
	Learn how to complete tasks related to subsidiary processing.
	Check out the Balancing Made Easy booklet.