Elimination Entries

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Hi All,

I am going through the manual of consolidation process.

Can any one help me with elimination process while running consolidation between two companies.

Below is the scenario:

Consolidation company -- CONS  (currency - USD )

Subsidiary companies -- Comp A  (currency - CDF ) &  Comp B (currency - USD)

There are some inter company transactions posted b/w Comp A & B, while running consolidation these entries needs to be eliminated.

I know that i need to create elimination rule in Consolidation company & mapped all those ledger a/cs which got posted with inter company entries and tried to run consolidation online process also by selecting elimination rule in elimination tab with proposal only option.

a) In which  company i need to create the elimination rule ?

Either COM A or COM B or Consolidation company ?

b) My question is when we run the elimination rule proposal what does the elimination rule ?

I request you please explain with an example of elimination rule does .

All Replies
  • I think the elimination rules are needed in each of the companies as they detail how the entries need to be eliminated.  However, the rules can only be executed in the elimination company.

    In your above example, I would create the rules in each of the companies; then designate my Consolidation company as the elimination company.  Then I would create the elimination proposal /  entries in the consolidation company.

    More information about setup are available on Customer Source.

  • First of all you have to mark the consolidation company as elimination company as well (or create a new elimination company). In the picture below I defined company 9005 as both consolidation and elimination company:

    Next step is to create a Ledger elimination rule in the consolidation/elimination company (in my case in company 9005):

    Within this rule you can create lines. In my case there is one mother (company 1014) and four daugthers (2016, 2017, 2018 and 2021). Two things need to be eliminated:

    • The participation within the mother v.s. the share holder capital in the daugthers (general ledger accounts 02* v.s. 09*)
    • The current accounts between the five companies (general ledger accounts 114* and 115*)
    The full amounts in the general ledger accounts need to be eliminated (elimination method: Net change).
    This is shown in the picture below. Note that we changed this screen a little bit in order to show source and destination dimensions in this screen, instead of clicking to sub screens. Nothing has been changed to the functionality of the whole elimination process.


    When all the settings are correct, you can create an elimination journal proposal in the elimination company.

  • Hi ,

    In the above both replies , SUNIL mentioned need to define the rules in each company , but DAAN mentioned that rules should define in Elimination company only .

    Bit confuse about the above statements . Could you clarify me the exact path to create the rules ?

  • If you want to create a Ledger Elimination Rules in a company that is not an elimination company, you will get the following message:

    This means that you will have to create the rules in the elimination company

  • Thanks DAAN for the clarification .

    You have mentioned that " The participation within the mother v.s. the share holder capital in the daugthers (general ledger accounts 02* v.s. 09*)

    The current accounts between the five companies (general ledger accounts 114* and 115*)

    The full amounts in the general ledger accounts need to be eliminated (elimination method: Net change)."

    Can you explain bit more about this ?

  • Please tell me what exactly you do not understand.

  • Hi DAAN ,

    My Question is in the consolidation company against the which accounts i need to create the elimination rule ?

    In the above post you mentioned general ledger accounts 02* v.s. 09* and general ledger accounts 114* and 115*.

    Could you explain bit more about the above mentioned accounts in detail ?

  • In mother 1014 I have ledger accounts:

    • 022016 Participation in daughter 2016               100 debit
    • 022017 Participation in daughter 2017               100 debit
    • 022018 Participation in daughter 2018               100 debit
    • 022021 Participation in daughter 2021               100 debit

    In each daughter (2016, 2017, 2018 and 2021) I have ledger accounts:

    • 080000 Share capital                                               80 credit
    • 080001 Retained earnings                                     20 credit

    In my consolidation company 9005 I created a rule that eliminates 022016 from company 1014 against 080000 and 080001 from company 2016 (100 debit against 80+20=100 credit). So, with this rule I can create an elimination journal entry in company 9005.