Creating and Configuring the Elimination of Intercompany Income and Expense
Last updated on 2025-07-09
Overview
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.
This article contains the following sections:
Configuring the Elimination of Intercompany Income and Expense
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:
Option
Description
Creating 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.
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 selectioncheck 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.
If you choose Individual or Closed , 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.
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.
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
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
For this option, select all accounts and/or items to be considered for the consolidation.
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.
With 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.
Post differences
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.
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.
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
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.
- 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.
Executing the Elimination of Intercompany Income and Expense
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.
Displaying and Deleting Created Elements
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
Note: Once all elements have been deleted, the state of the wizard is Not executed again.
Displaying the App Properties
The App properties are displayed on the tab of the same name :
- 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.