Step four: Create an Intercompany Eliminations journal

Intercompany elimination information is posted to Elimination units by an Intercompany Eliminations journal, not by standard data entry. Other types of journal entries may be posted to Elimination Units. However, Intercompany Eliminations journals can post only to an Elimination Unit.

The properties of an Intercompany Eliminations journal include its version, periodicity, and effective life. The journal is then defined by matching accounts and the post remainder and post proportional accounts.

In an Intercompany Eliminations journal, a schedule line with the formula type I-Intercompany Account is matched with one or more other schedule lines to create a journal entry that is the result of the eliminations process. Lines with a formula type of I-Intercompany Account are displayed in the Select From list.

Matching can be done in any currency into which the Intercompany Eliminations account data has been translated. The matching process takes the results of the translation and compares the two accounts. Unmatched amounts left from this process are posted to the lines specified in the post remainder and post proportional accounts.

Intercompany elimination journals are processed through CPM Workstation. When the Administrator or Controller processes the intercompany eliminations, they must provide a tolerance level. The tolerance level specifies what constitutes a match. This can be expressed as a fixed amount or a percentage.

The journal, the matching of the paired lines, books to the first common parent that contains an Elimination unit within the Organization hierarchy.

The remaining balance is posted to the accounts specified by the Post remainder and Post third-party lists. The Post third-party lists enable you to select the accounts to which any proportionally consolidated data should be posted. Intercompany data is proportionally eliminated when Intercompany Eliminations journal data is consolidated for affiliated units that are less than 100% owned. The third-party elimination coincides with the proportional consolidation of the data for these units. This ensures the intercompany data is eliminated completely.

The accounts specified for Post Remainder must be the same type, either P&L or Balance Sheet, as the matched accounts. A remainder line can be any of these types:

• D – Data
• I – Intercompany
• F – Formula
• A – Allocation