Intercompany Elimination – Key Points
Intercompany elimination removes any transactions between the consolidation units so that only transactions with 3rd parties remain.
Intercompany elimination does not require specific intercompany accounts because the internal criteria used is based in part on the partner consolidation unit dimension.
As intercompany data is reported by both entities, the two-sided elimination approach is used to trigger the elimination.
The elimination can only take place if the source data is already translated into group currency.
Consolidation Monitor – Intercompany Elimination Tasks
There are several types of intercompany eliminations that are run in the consolidation monitor:
- Intercompany Revenue and Cost
- Dividends from subsidiaries
- Intercompany Account payable & receivable – rules-based
- Intercompany Account payable & receivable – ICMR integrated
- Intercompany profit in inventory.
Rule-Based Versus ICMR-Based Intercompany Elimination
Task 2041- IC Elim Balance Sheet (RB)
Reclassification Rule-Based
Total difference only.
Task 2042 – IC Elim Balance Sheet (ICMR)
Integrated with ICMR
Differences can be broken down into transaction, translation, and other.
In the figure above:
Posting level 00, contains the original incoming data
Posting level 20, contains the eliminations.
Reason code Z98, is assigned to the transaction difference.
The TA10 Account Receivables is 23,625.00.
The US10 Account Payables is -30,712.50 for a total difference of -7,087.50.
The transaction difference is: -5,395.00
Subitem 915 - Variation: -1495
Subitem 900 - Opening Balance: -3900
The translation difference is: -1,692.50.