Outlining Profit in Inventory Elimination

Objectives

After completing this lesson, you will be able to:

  • Outline profit in inventory elimination

Outline Profit in Inventory Elimination

ABC Corporation sells goods between consolidation units for a profit. When the buyer retains the goods in stock, the profit in inventory must be eliminated. Up until now, they have been making this adjustment manually, but now with group reporting, they can automate it.

In our use case, consolidation unit BE manufactured a product at a cost of 9,000 and sold it to consolidation unit FR for 10,000.

The following delivered objects are used to eliminate the internal profit in inventory:

  • Consolidation task 2015 – IC Elim. Inventory Profit

  • Method S2015 – IC Elim. Inventory Profit

  • Document type 2J – IC elim IPI (20/AUT)

  • Statistical financial statement items

  • Clearing FS items (13100D & 41200D) to collect ending inventory amount and estimated profit margin

In the following video you will learn how to automate the elimination of intercompany profit in inventory.

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