Example

For the purpose of this example, these segment structures are created:

Primary Segment structure:

  • Business Segments Total
    • Unassigned
    • Business Unit A&E
      • Automotive
      • Trading
      • Business Unit A&E_Elim
    • Business Unit S&CG
      • Consumer Goods
      • Services
      • Business Unit S&CG_Elim
    • Not applicable
    • Business Segments Total_Elim

Secondary Segment structure:

  • Business Segments Total
    • Unassigned
    • Not applicable
    • EMEA
      • Europe
      • Middle East
      • EMEA_Elim
    • APAC_AMER
      • Asia
      • America
      • Africa
      • APAC_AMER_Elim
    • Business Segments Total_Elim

Tertiary Segment structure:

  • Business Segments Total
    • Unassigned
    • Not applicable
    • AS600 Aquachrono
      • All Season Tires
      • Summer Tires
      • Winter Tires
      • AS600 Aquachrono_Elim
    • AS700 Supersport
      • Special Offers
      • SUV (4x4) Tires
      • AS700 Supersport_Elim
    • Business Segments Total_Elim

Elimination setup

Journal 1 includes entity RU0002 Genesis Finance, intercompany RU0001 Genesis Cars, and the Other Financial Income account. Other Financial Income is an account setting of the elimination setup. Journal 1 has two lines.

Journal 2 is created after Journal 1. Journal 2 includes the Other Financial Expenses contra account for RU0001 Genesis Cars as the entity and RU0002 Genesis Finance as the intercompany. The contra account is a setting of the elimination setup. Journal 2 has two lines.

Difference accounts

If the element coordinates of an entity/intercompany and an account are identical to the counterpart (intercompany/entity and contra account), eliminations are handled through intercompany difference accounts.

This table shows an example of identical element coordinates for an entity/intercompany relation and its counterpart:

Entity Intercompany Account Primary Secondary Tertiary PrimPartner SecPartner Tertiary Value
Genesis Finance Genesis Cars Other Financial Income Automotive Middle East Special Offers Trading Europe Special Offers 80.15
Genesis Cars Genesis Finance Other Financial Expenses Automotive Middle East Special Offers Trading Europe Special Offers -80.15

Journal 1

This list shows base data for Journal 1:

  • Group: GR0001
  • Level: Adjusted Entity Data
  • Entity: RU0002 Genesis Finance
  • Intercompany: RU0001 Genesis Cars
  • Account: Other Financial Income
  • Primary Segment: Automotive
  • Secondary Segment: Middle East
  • Tertiary Segment: Special Offers
  • Primary Partner Segment: Trading
  • Secondary Partner Segment: Europe
  • Tertiary Partner Segment: Special Offers
  • Value: +80.15

Because the direct parent of the Automotive element in the example Primary Segment structure is Business Unit A&E, Automotive is exchanged with the Business Unit A&E_Elim element. Similarly, the Middle East element in the example Secondary Segment structure is exchanged with the EMEA_Elim element. The Special Offers element in the example Tertiary Segment structure is exchanged with the AS700 Supersport_Elim element.

This table shows the elements that the first elimination journal line contains for these coordinates:

  • Group: GR0001
  • Level: Adjusted Entity Data
  • Entity: RU0002 Genesis Finance
  • Intercompany: RU0001 Genesis Cars
  • Account: Other Financial Income
Primary Segment Secondary Segment Tertiary Segment Primary Partner Segment Secondary Partner Segment Tertiary Partner Segment Debit
Business Unit A&E_Elim EMEA_Elim AS700 Supersport_Elim Trading Europe Special Offers 80.15

In the first elimination journal line, the segment elements interchange with the elimination elements of the direct parents. The partner segment elements do not change.

This table shows the elements that the second elimination journal line contains for these coordinates:

  • Group: GR0001
  • Level: Adjusted Entity Data
  • Entity: RU0001 Genesis Cars
  • Intercompany: RU0002 Genesis Finance
  • Account: Intercompany Differences Financial Income
Primary Segment Secondary Segment Tertiary Segment Primary Partner Segment Secondary Partner Segment Tertiary Partner Segment Debit
Business Unit A&E_Elim EMEA_Elim AS700 Supersport_Elim Automotive Europe Special Offers 80.15

In the second elimination journal line, these operations take place:

  • The entity is interchanged with the intercompany.
  • The Intercompany Differences Financial Income account is used
  • The counterpart of the Primary Partner Segment (Trading) is booked as the Primary Segment with the _Elim element of the direct parent (Business Unit A&E_Elim).
  • The counterpart of the Secondary Partner Segment (Europe) is booked as the Secondary Segment with the _Elim element of the direct parent (EMEA_Elim).
  • The counterpart of the Tertiary Partner Segment (Special Offers) is booked as the Tertiary Segment with the _Elim element of the direct parent (AS700 Supersport_Elim).

For the second elimination journal line, these steps are performed:

  1. An entity and intercompany interchange.
  2. An interchange to a difference account.
  3. The coordinates of segments are interchanged with partner segments because the entity and intercompany have interchanged.
  4. The segment elements are interchanged with the elimination elements of the direct parents. The partner segment elements do not change.

Journal 2

Journal 2 covers the Other Financial Expenses contra account for RU0001 Genesis Cars as the entity and RU0002 Genesis Finance as the intercompany.

This list shows base data for Journal 2:

  • Group: GR0001
  • Level: Adjusted Entity Data
  • Entity: RU0001 Genesis Cars
  • Intercompany: RU0002 Genesis Finance
  • Account: Other Financial Expenses
  • Primary Segment: Automotive
  • Secondary Segment: Middle East
  • Tertiary Segment: Special Offers
  • Primary Partner Segment: Trading
  • Secondary Partner Segment: Europe
  • Tertiary Partner Segment: Special Offers
  • Value: -80.15

Because the direct parent of the Automotive element in the example Primary Segment structure is Business Unit A&E, Automotive is exchanged with the Business Unit A&E_Elim element. Similarly, the Middle East element in the example Secondary Segment structure is exchanged with the EMEA_Elim element. The Special Offers element in the example Tertiary Segment structure is exchanged with the AS700 Supersport_Elim element.

This table shows the elements that the first elimination journal line contains for these coordinates:

  • Group: GR0001
  • Level: Adjusted Entity Data
  • Entity: RU0001 Genesis Cars
  • Intercompany: RU0002 Genesis Finance
  • Account: Other Financial Expenses
Primary Segment Secondary Segment Tertiary Segment Primary Partner Segment Secondary Partner Segment Tertiary Partner Segment Credit
Business Unit A&E_Elim EMEA_Elim AS700 Supersport_Elim Trading Europe Special Offers 80.15

In the first elimination journal line, the segment elements interchange with the elimination elements of the direct parents. The partner segment elements do not change.

This table shows the elements that the second elimination journal line contains for these coordinates:

  • Group: GR0001
  • Level: Adjusted Entity Data
  • Entity: RU0001 Genesis Cars
  • Intercompany: RU0002 Genesis Finance
  • Account: Intercompany Differences Financial Expenses
Primary Segment Secondary Segment Tertiary Segment Primary Partner Segment Secondary Partner Segment Tertiary Partner Segment Debit
Business Unit A&E_Elim EMEA_Elim AS700 Supersport_Elim Automotive Europe Special Offers 80.15
Note: Genesis Cars is the entity that has the revenues and receives the difference.

In the second elimination journal line, these operations take place:

  1. The entity is interchanged with the intercompany.
  2. The counterpart of the Primary Partner Segment (Trading) is booked as the Primary Segment with the _Elim element of the direct parent (Business Unit A&E_Elim).
  3. The counterpart of the Secondary Partner Segment (Europe) is booked as the Secondary Segment with the _Elim element of the direct parent (EMEA_Elim).
  4. The counterpart of the Tertiary Partner Segment (Special Offers) is booked as the Tertiary Segment with the _Elim element of the direct parent (AS700 Supersport_Elim).