Elimnination of Investment Income/Expense

[Former Member]

I have requirement to eliminiate intercompany investment against expenses.

Company X has investment in company Y for 90% of stocks.

Company Y distributes dividend income ( $1000)and Company X share is 90%($900)

Company X accounts for investment income , but pays a tax of 30%. Hence accounts for investment income as $630, tax is $270.

How will this work in elimination where X will report income of $630 and Y will report the amount to be eliminated as $900.

[Former Member · Accepted solution]

Shivaji,

Your accounting entry is wrong

Investment income should not be reduced to the extent of tax.

Investment Income should be reported only at $ 900 and not at $ 630.

In which case the investment income in Co X and Div exp in Co Y will automatically get eliminated during elimination run as we expect TP will be available.

[Former Member · Accepted solution]

Hi Indirar,

Before concluding if my entry is correct or wrong, can you read the attached literature which speaks of very same issue/entry

http://help.sap.com/saphelp_sem60ep1/helpdata/en/22/85723bbe588200e10000000a114084/content.htm

Even to certain extent I feel the accounting entry could not be right, but after seeing the above SAP link I want to recheck.

[Former Member · Accepted solution]

why i always cannot open help.sap.com?

does it need an authorization to open the help?

please kindly inform.

thanks.