Outlining Profit in Inventory Elimination

Objectives

After completing this lesson, you will be able to:

  • Outline profit in inventory elimination

Eliminating Intercompany Profit in Inventory

Robert typing on this computer

At ABC Corporation, there are intercompany profits in finished goods inventory. You need to configure a reclassification to eliminate the intercompany profit in inventory.

Eliminating Profit in Inventory

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

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.

France sells goods for 10000 with a margin of 10%. The belgium inventory is 10000. Profit of -1000 is eliminated from inventory

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

Log in to track your progress & complete quizzes