Outlining Intercompany Elimination Possibilities

Objectives

After completing this lesson, you will be able to:

  • Outline the intercompany elimination possibilities

Intercompany Elimination Possibilities

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

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.

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