For a single company, PSAK 118 is mainly about mapping accounts and restructuring reports. For a group, the challenge multiplies: many entities, many COAs, many currencies, and intercompany transactions to eliminate. The key is not making everything identical — it is making classification consistent and explainable.
1. The Basic Principle: Classification at the Reporting Entity Level
PSAK 118 states that classification is performed at the reporting entity level. That means an entity’s separate financial statements may classify items differently from the consolidated statements — and that is allowed, provided it is disclosed.
Example: a subsidiary whose main activity is providing customer financing may classify interest as operating. In a manufacturing group’s consolidation, that interest may become financing. The difference is valid, but must be explained.
2. Common Challenges
- Different COAs — each entity has its own account structure.
- Different currencies — FX and translation add complexity.
- Intercompany transactions — sales, loans, and charges that must be eliminated.
- Different accounting policies — e.g., revenue recognition or depreciation.
- Different year-ends or systems — making timely consolidation harder.
3. Three Layers of Consistency
| Layer | What is aligned | Example |
|---|---|---|
| Policy | Classification and measurement principles | Borrowing interest goes to financing in all entities |
| Data | Account structure and mapping | Group COA template + mapping dictionary |
| Reporting | Format and subtotals | Operating profit and profit before financing & tax |
Consistency does not mean every entity must be identical. What matters: differences have a reason and are documented.
4. The Role of a Multi-Company ERP
Odoo supports multi-company and multi-currency in a single database. Each transaction belongs to one company, and users can be granted access to several companies. For intercompany transactions, the Inter-Company Rules module can automate counterpart documents.
Things to watch:
- COA per company — Odoo allows different COAs. For a group, consider a shared template so mapping is easier.
- Consolidation — multi-company is not automatic consolidation. You still need elimination and adjustment processes, either with a Consolidation module (if available in your edition) or a separate process.
- Currency — keep translation rates and transaction rates separate.
- Access rights — separate access per company to keep data secure.
5. Preparation Steps
- Map the entities — who reports, who is a subsidiary, and how consolidation works.
- Create a group classification dictionary — one category list for all entities.
- Align the COA — at least for accounts in different categories.
- Identify intercompany transactions — including loans and interest.
- Prepare consolidation workpapers — elimination, adjustments, and translation.
- Test with 2026 figures — compare group profit before and after.
- Document differences — separate vs consolidated classification.
6. A Short Checklist
- All entities use the same category definitions.
- Mixed accounts are split or mapped.
- Intercompany transactions are identified and can be eliminated.
- Translation rates and transaction rates are separated.
- Consolidated reports have clear PSAK 118 subtotals.
- Group MPMs are defined and reconciled.
- Differences between separate and consolidated classification are disclosed.
Closing
PSAK 118 in a group is not a project to make every entity identical. It is a project to unify the language: the same categories, mappable data, and reports that can be read together. A multi-company ERP helps — but classification and consolidation policy decisions remain with the accounting team.
Want to prepare your group for PSAK 118? Talk to the Sinergi Data Totalindo (SDT) Team.
Note: this article refers to the official PSAK 118 text. Consolidation feature availability may differ by Odoo edition and version. Classification and consolidation decisions still require accounting judgment and review by practitioners/auditors. Written by Sinergi Data Totalindo, PT.