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Eliminations in Consolidation Company

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Posted on by heyMike

Hi folks,

I am new to consolidation and intercompany transactions and I have read all the available material over the internet which gives insights about elimination entries however, I didn't find anything relevant to my concern.

I would like to figure out what amount is to be eliminated & how it should be eliminated after consolidation as I know the elimination entries will takes place in my Consolidation Company i.e. Holding Company.

My Scenario

I have two companies i.e. Company A & Company B

-Company A sell to Company B

-Company B buys from Company A using Intercompany transaction.

-I am having Non-Inventory items in both the companies

-I am using same GL Accounts across companies

-Common Dimension across companies & managing Intercompany Dimension on Sales & Purchase Transaction to identify which transactions are intercompany transactions.

-Both the companies are dealing in same currency

Let's assume I have run the consolidation - now here Intercompany Sales & Purchase values also being fetched

I would like know what exact amount is to be eliminated (Using Gen Journal) for Company A & Company B

E.g. Entry

Company B buys goods worth $ 1000 from Company A

Company A sells goods worth $ 1000 to Company B

Thanks for reading out the use case.

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Jainam M. Kothari 15,631 Super User 2025 Season 2 on at

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Hello,

After consolidating financials in your Holding Company, you need to eliminate intercompany transactions to avoid overstating revenue and expenses.

In above scenario, Company A sells non-inventory items worth $1,000 to Company B, which records a matching purchase. To eliminate this, you post a general journal in the Holding Company that debits intercompany sales revenue and credits intercompany purchase expense for $1,000 each, using the same G/L accounts and intercompany dimensions for traceability and accuracy.

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Mansi Soni 8,907 Super User 2025 Season 2 on at

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Hello,
In your scenario, after running consolidation, the $1,000 intercompany transaction between Company A (seller) and Company B (buyer) must be eliminated in the Consolidation (Holding) Company to avoid overstating group revenue and expenses. Since both companies use the same G/L accounts and currency, the elimination entry in the consolidation company would be:

Debit Intercompany Sales (Revenue) $1,000
Credit Intercompany Purchases (Expense) $1,000

This entry removes both the internal revenue and expense. Use your common dimension to identify intercompany transactions during consolidation and ensure that only intercompany amounts are eliminated. Post this journal manually or via an elimination rule in the consolidation company to keep group financials accurate.

Hope this answer will help you!

Regards,
Mansi Soni

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YUN ZHU 95,331 Super User 2025 Season 2 on at

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Hi, hope the following can give you some hints as well.

https://community.dynamics.com/forums/thread/details/?threadid=c88e3da2-0333-446b-b85e-af5a68aa4952

https://www.youtube.com/watch?v=IIcXFDKaQgY

https://learn.microsoft.com/en-us/dynamics365/business-central/reports/report-16?wt.mc_id=DX-MVP-5004336

Thanks.

ZHU

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Sohail Ahmed 11,136 Super User 2025 Season 2 on at

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To eliminate intercompany transactions after consolidation, you need to reverse the internal revenue and expense.

Since Company A sold and Company B purchased for $1,000:

In the Consolidation Company, post a General Journal elimination entry like:

Dr Sales (Company A’s revenue) $1,000

Cr Cost (Company B’s expense) $1,000

This offsets the internal sale/purchase so it doesn't inflate consolidated financials.

Use the common dimension to filter and identify these intercompany lines for accurate elimination.

✅ Mark this answer as verified if it helps you.

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