Question

Group consolidation: Intercompany Elimination between IS & BS Accounts


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As per the current design of the IFS Group Consolidation design, we are not able to combine income statement accounts with balance sheet accounts in one IC elimination rule.

  1. What is fundamental rationale behind this design? Is there any accounting basis for it?
  2. There are some businesses scenarios where one leg in an expense account of a company whereas the other leg is in a balance sheet account of another company.

For example, in reimbursements, one company will credit the amount to reimbursement account (Current Asset) and whereas it will hit an expense account in the other company.  So these kind of transactions will not be automatically eliminated as IC rule cannot contain both IS and BS accounts.

 

What is the recommended approach (best practice) to handle such scenarios automatically?


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