Consolidation Logic
This article explains the consolidation logic in Model Reef and how to use branches to build clean consolidated views for groups, divisions and portfolios.
Consolidation is branch based
Consolidation in Model Reef is entirely driven by the branch tree:
Each branch has its own three statement outputs.
A parent branch shows the sum of its own variables plus all child branch variables.
The root branch shows the consolidated model.
There is no separate consolidation worksheet or manual linking layer. The tree itself defines rollups.
Statement level consolidation
For each parent branch (including the root), Model Reef consolidates:
P&L
Revenue, COGS, Opex, Staff and other line items from the parent branch and all children.
Derived metrics such as Gross Profit, EBITDA, EBIT, EBT and NPAT.
Balance Sheet
Assets, liabilities and equity balances, with closing balances based on movements from all variables in the subtree.
Cash derived from the consolidated Cashflow Statement.
Cashflow Statement
Operating, investing and financing cashflows from all variables in the branch subtree.
Net cash movement reconciled to opening and closing cash.
Cashflow Waterfall
Consolidated view of operational cash and financing flows derived from consolidated statements.
You can therefore run P&L, Balance Sheet, Cashflow and Waterfall at any branch level.
Branch toggles and partial consolidation
Enabling or disabling a branch determines whether it contributes to parent and root level consolidation:
Enabled branch
Included in parent and root consolidation.
All child branches are included unless individually disabled.
Disabled branch
Excluded from parent and root consolidation.
Useful for testing alternative structures or scenarios.
A common pattern for partial consolidation is:
Enabled branches for continuing operations.
Disabled branches for discontinued or hypothetical units, retained for analysis but excluded from headline numbers.
Modelling eliminations and intercompany flows
Model Reef does not automatically perform complex consolidation eliminations such as:
Intercompany revenue and cost eliminations.
Intercompany loan and interest eliminations.
Minority interest tracking.
Instead, you model eliminations explicitly, typically by:
Creating a dedicated Eliminations branch.
Adding variables that reverse intercompany revenue, costs, assets or liabilities at the group level.
Ensuring that intercompany loans or balances are mirrored and then netted out via elimination entries.
Pattern:
Each entity branch shows its stand alone statements including intercompany flows.
The parent or group branch includes both entity branches and the Eliminations branch, so intercompany items cancel out at the consolidated level.
This gives you full control and transparency over elimination logic.
Currency and consolidation
Each Model Reef model uses a single currency. There is no automatic multi currency consolidation.
For groups that span multiple currencies you have two main options:
Single currency model
Convert input data to a chosen reporting currency before import.
Use FX rate drivers to translate values where needed.
Consolidate using a branch tree in that one currency.
Per currency models
Build one model per currency and consolidate offline in a separate reporting tool.
Use reference FX data and cross checks to maintain consistency.
Whichever approach you take, be explicit about the reporting currency of each model and document FX assumptions clearly.
Designing consolidation ready structures
To get clean consolidated outputs:
Use one branch per legal entity where entity level reporting matters.
Group entities under a parent branch for group level reporting.
Keep branch naming consistent with legal or management structures.
Use an Eliminations branch for intercompany flows that must be netted at group level.
Keep categories aligned across branches so consolidated categories make sense.
If you later reorganise the group, you can reparent branches without rebuilding variables.
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