Intercompany Sales

[Former Member]

Hi all,

My client would like to add new accounts or rules for the Intercompany sales accounts. What are "Intercompany sales accounts"? I can understand the concept of Intercompany Sales but couldnt understand what could be the accounts for Intercompany sales.

Any input is highly appreciated!!

Thanks,

Avani.

[Former Member · Accepted solution]

hi

A company may consist of one or more company codes. If a company has some kind of trading relationship with another company it is called a trading partner.

The trading partner information is used for intercompany elimination, such as elimination of intercompany sales and purchases and elimination of intercompany Accounts Receivable and Accounts Payable.

You determine the trading partner information stored in financial postings by the way you set up financial document types.

Legal requirements dictate that an enterprise consisting of several companies must consolidate its financial figures to consolidate reporting. Consolidating means eliminating all intercompany results, leaving only results achieved against third parties and producing a balance sheet that only shows the position of the enterprise against third parties by eliminating all intercompany relationships. For example, a consolidated profit and loss (P&L) statement doesn’t show intercompany sales or intercompany Accounts Receivable (AR).

You can consolidate data on several levels. For example, with a large enterprise you can consolidate on a country, region, or world level. To consolidate on specific levels, you need to know per financial transaction which intercompany business partner is involved.