Would it ever be possible for a holding company to require some integration of a target (for example, accounting systems, IT, employee policies) or for a diversified conglomerate to go the route of having little to no integration. Would be some of the strengths and weaknesses of either of these approaches.
We have a few holding companies a few levels above the operating company. The only integration that is done is to create a company in the general ledger for predominately tax purposes. Our tax department seems to be the only department that has a use for it in the system. Some stock entries might be done to have some record of that.
The Finance staff finds it to be additional work to enter journal entries and there are more reconciliations that have to be maintained. However, it makes the tax department happy, so that is a strenth. Seriously, though, it is a strenth to have some processes in place with regard to holding companies.
We have several holding and investment companies but we do not carry out any integration at the holding company level. It is mostly done at the OP co level.
However there is entity created in the ERP to which certain tax and group related costs are cross charged.
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