Alternative to not recognizing the carry forward in the consolidation of debts

Instead of recognizing the carry forward in the next period, you can eliminate 100% of the payables and receivables.

Example:

In 2020, this journal is posted:

	Entity A - receivables 100,000.00
Entity B - payables 120,000.00
	Entity A - difference account 20,000.00

Because no carry forward is performed for 2021, this journal entry is posted by the system:

	Entity A - receivables 140,000.00
Entity B - payables 145,000.00
	Entity A - difference account 5,000.00

In this example, the difference is -15,000.00. This is because, if you do not perform the carry forward, you only consider the elimination of reported intercompany payables and receivables. You do not consider changes. Part of the difference between the receivables and payables is already recognized in the previous period and only the change of this difference must be recognized in the current period. To resolve this issue, you must adjust either the profit and loss account or the opening balance of the equity account. Which you do depends on whether the current period difference is presented in the profit and loss or in the equity.