Consolidating business units
This table provides an example of intercompany payables and receivables among three business units that each use the Affiliate Chart Field: Another method of tracking activity between business units is to use different Chart Field values—typically different accounts—for intercompany transactions.
Instead of using the Affiliate Chart Field, you could use the following accounts to identify the same transactions that were shown in the previous exhibit: An elimination set represents a related group of intercompany accounts that record both sides of each transaction between units.
These Due From and Due To rows in the ledger are candidates for elimination when you run the Consolidations process.
Instead, he said Dyn Corp is seeking to expand its existing expertise to countries beyond the United States.To gain a complete picture of the entire organization, you combine (consolidate) all the assets and liabilities of each business unit, eliminating intercompany transactions and minority interest relationships by creating consolidation elimination journal entries.You use trees to define the relationships among business units in a consolidation, creating a separate consolidation tree for each configuration.In the following example, Company B0001 sold services to Company B0002.The Revenue and Expense accounts need to be eliminated in addition to the Due From and Due To accounts: The Affiliate Chart Field is specifically reserved to map transactions between business units when using a single intercompany account.
Search for consolidating business units:
While there may be situations that require you to report gross consolidations (combining business unit ledger balances without eliminations), in most cases, you want to eliminate or cancel out the effect of intercompany transactions.