Elimination of Intercompany Income and Expense

Getting Started

Global Functions

Administration

Extended Planning & Analysis (xP&A)

Consolidation & Financial Planning

User Interface of Lucanet Consolidation & Financial Planning

General Functions

Basic Configuration

Dashboards

Reporting & Analyzing

Import and Journals

Planning

Consolidation

Consolidation 1

Consolidation 2

All Steps at a Glance

Basic Elements

Defining the Group Structure

Administrating Master Data

Creating Consolidated Financial Statements

Creating and Configuring Data Transfer and Proportioning

Creating and Configuring Consolidation Apps

Debit/Credit Shifts in Consolidation Areas

Elimination of Income from Investments

Elimination of Intercompany Income and Expense

Elimination of Intercompany Debt

Equity Elimination

Reclassification of profit or loss from previous year in consolidation areas

Elimination of Intercompany Profit or Loss in Current Assets

Notes on Migration from Lucanet.Financial Client

Adjust and Reclassify Values in Consolidation Areas

Executing the Consolidation

Dimensions

Excel-Integration

Workspace Configuration

ESG Reporting

Disclosure Management

XBRL Tagger

Lease Accounting

Banking & Cash Management

Data Collection

Tax Compliance & Reporting

Glossary

Using the app for elimination of intercompany income and expense, the income and expenses that are the result of business transactions between companies in a given consolidation area are eliminated for consolidated financial statements.

In addition, it is possible to generate a report on differences that may arise when executing the app. The report displays the difference amounts with the corresponding difference accounts for each intercompany relationship.

When configuring the app, you can choose from the following options:

Elimination of intercompany income and expense over all selected accounts

With this option, the app will eliminate intercompany transactions between any pair of two consolidation units across all chosen accounts based on the given partner information. Any difference from elimination will be recognized on the second consolidation unit

Elimination of intercompany income and expense as elimination between seller and buyer

With this option, the app will eliminate intercompany transactions posted to seller accounts with the intercompany transactions posted to the respective buyer accounts based on given partner information. Any difference from elimination will be recognized on the buyer side of the intercompany transaction.

IC transactions between two consolidation units that are both posted to the seller accounts (both to the buyer accounts) are not consolidated, but cleared against the difference account. This option can also be used to present a one-sided elimination.

To configure the app for elimination of intercompany income and expense, click the app in the structure view and click Edit in the displayed dialog.

Configure the steps as described below.

In the Settings step, specify the time and the relevant consolidation areas and/or units for consolidation:

Shows the 'Settings' step — Step 'Settings'

The following options are available on the Settings step:

Option	Description
Create postings	Time of consolidation: - Per month — The app eliminates the intercompany transactions in each month of the consolidation period and creates monthly consolidation postings. - Accumulated at the end of the period — The app eliminates the intercompany transactions accumulated in the last month of the consolidation period and creates a consolidation posting only in the last month of the consolidation period. Note: For each consolidation unit that is deconsolidated during the consolidation period, an accumulated consolidation posting is carried out in the last month of inclusion in the consolidation area.
Consolidation area and/or consolidation unit	Consolidation groups and/or units of the selected group for which the consolidation is to be performed. By default, all consolidation areas and units within the group are included in the consolidation. If you only want to include certain consolidation groups and units in the consolidation, activate the Individual selection check box and select one of the following options: - Individual — In the table, select individual consolidation areas and/or consolidation units to be considered in the consolidation. - Exclude — In the table, select the consolidation areas and/or consolidation units that are to be excluded from consolidation. Note: If you choose Individual or Exclude, the app will perform no eliminations for intercompany transactions of the excluded consolidation units.

Option

Description

Create postings

Time of consolidation:
-

Per month

— The app eliminates the intercompany transactions in each month of the consolidation period and creates monthly consolidation postings.
-

Accumulated at the end of the period

— The app eliminates the intercompany transactions accumulated in the last month of the consolidation period and creates a consolidation posting only in the last month of the consolidation period.

Note:

For each consolidation unit that is deconsolidated during the consolidation period, an accumulated consolidation posting is carried out in the last month of inclusion in the consolidation area.

Consolidation area and/or consolidation unit

Consolidation groups and/or units of the selected group for which the consolidation is to be performed.

By default

all

consolidation areas and units within the group are included in the consolidation. If you only want to include certain consolidation groups and units in the consolidation, activate the

Individual selection

check box and select one of the following options:
-

Individual

— In the table, select individual consolidation areas and/or consolidation units to be considered in the consolidation.
-

Exclude

— In the table, select the consolidation areas and/or consolidation units that are to be excluded from consolidation.

Note:

If you choose

Individual

Exclude

, the app will perform no eliminations for intercompany transactions of the excluded consolidation units.

In the Adjustment levels step, sepcify the adjustment levels for consolidation.

Shows the 'Adjustment levels' step — Step 'Adjustment levels'

The following options are available on the Adjustment levels step:

Option	Description
Basis	Adjustment level group containing all adjustment levels for data imports and adjustment postings which need to be considered during consolidation. Please ensure that this adjustment level group contains the adjustment level for proportioning.
Target	Adjustment level for consolidation postings to be used for the postings.

In the Consolidation step, specify the procedure for the elimination of intercompany income and expense as well as the required accounts and the transaction type.

Shows the ‘Elimination’ step — ‘Elimination’ step

The following options are available on the Elimination step:

Option	Description
Account or items with intercompany transactions	Accounts for elimination of intercompany income and expense. Choose one of the following options: Elimination over all selected accounts — The app will eliminate intercompany transactions between any pair of two consolidation units across all chosen accounts based on the given partner information. Any difference from elimination will be recognized on the second consolidation unit. For this option, select all accounts and/or items to be considered for the consolidation. Elimination between seller and buyer — The app will eliminate intercompany transactions posted to seller accounts with the intercompany transactions posted to the respective buyer accounts based on given partner information. Any difference from elimination will be recognized on the buyer side of the intercompany transaction. For this option, assign all accounts and/or items that are to be included in the consolidation to either the seller or the buyer by selecting the accounts and/or items in the corresponding area.

Option

Description

Account or items with intercompany transactions

Accounts for elimination of intercompany income and expense. Choose one of the following options:

Elimination over all selected accounts

— The app will eliminate intercompany transactions between any pair of two consolidation units across all chosen accounts based on the given partner information. Any difference from elimination will be recognized on the second consolidation unit. For this option, select all

accounts and/or items

to be considered for the consolidation.

Elimination between seller and buyer

— The app will eliminate intercompany transactions posted to seller accounts with the intercompany transactions posted to the respective buyer accounts based on given partner information. Any difference from elimination will be recognized on the buyer side of the intercompany transaction. For this option, assign all

accounts and/or items

that are to be included in the consolidation to either the

seller

or the

buyer

by selecting the accounts and/or items in the corresponding area.

Default values

Account and transaction type that are to be used by default for postings of differences that arise during consolidation.

The account itself must not contain any intercompany transactions to be consolidated.

Deviating values

If you want to define different accounts or transaction types for certain intercompany relationships, activate the option Advanced settings.

After that, in the Intercompany relationship column, select the two related companies for which you want to define different values and configure a deviating account and/or a deviating transaction type.

Shows the 'Advanced settings' options in the 'Consolidation' step — Advanced settings

In the Reports step, you can specify the consolidation area(s) and period for which a report on differences should be generated if any arise when executing the app.

The report displays the difference amounts with the corresponding difference accounts for each intercompany relationship.

The following options are available on the Report step:

Option	Description
Generate report	Activate the option to create a report on the difference amounts when executing the app.
Included consolidation areas	Consolidation areas for which the report should be generated. Note: The report can only be created for consolidation areas that were included in the Settings step for the app execution.
Reporting period	Period for the report. - Year to date (based on fiscal year of consolidation area) — The report is created from the start of the financial year for which the consolidated financial statements are created. - Consolidated financial statements — The report is generated for the period of the current consolidated financial statements.

The report is created in an executable folder named Reports for name of the consolidated financial statements element when executing the app and is linked in the detail view of the Consolidated financial statements workspace in the Report column.

Each created report can be exported in Excel format.

Shows the overview table in the 'Consolidated financial statements' workspace. The 'Reports' column is selected, showing the links to the reports generated by the apps. — Linked reports in the consolidated financial statements overview

As long as a step has not been fully configured and/or configuration errors exist, it is displayed with a red exclamation mark

Once a step is configured completely and without any errors, it is displayed with a green check mark

You can close the configuration dialog by clicking the arrow icon

at the top left.

To change the name of the app, select the app in the tree view and choose

Properties

from the context menu.

You can execute the app for elimination of intercompany income and expense either separately, together with other apps in an executable folder or as part of consolidated financial statements.

How to proceed in each case is described under Execute consolidation.

On the Created elements tab, the difference reports and postings that were created during the app execution are shown.

The table provides the following information:

Type

of the element

Path

under which the element was created When you click on the link, you are taken directly to the posting in the relevant

journal

or to the report.

Date of the

last execution

that created the element

Shows the 'Created elements' tab of a Consolidation app — Tab 'Created elements'

If necessary, you can delete all elements.

Note: Once all elements have been deleted, the state of the wizard is Not executed again.

The App properties are displayed on the tab of the same name:

Shows the 'Properties' tab of a consolidation app — 'Properties' tab

The following App properties are displayed:

Type

of the element

Function of the

App

Version

of the element.

New available version

As soon as a new version of the app is available that contains changes to the app configuration and/or the calculation logic of the app, the Refresh command is displayed, allowing you to update the app to the latest version.

Information about the changes to each version can be found in the Release Notes, which can be accessed via the link of the same name.

We strongly recommend to update all apps to the new version as soon as possible because it cannot be guaranteed how long an app with an obsolete version can be executed.

Last updated on Aug 16, 2023

Creating and Configuring the Elimination of Intercompany Income and Expense

Overview

Configuring the Elimination of Intercompany Income and Expense

Executing the Elimination of Intercompany Income and Expense

Displaying and Deleting Created Elements

Displaying the App Properties

Creating and Configuring the Elimination of Intercompany Income and Expense

Overview

Configuring the Elimination of Intercompany Income and Expense

Settings

Adjustment levels

Elimination

Post differences

Report

Executing the Elimination of Intercompany Income and Expense

Displaying and Deleting Created Elements

Displaying the App Properties

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