What is eliminating entry in SAP EC-CS - Consolidation?

SAP Term: eliminating entry

• Component: EC-CS

• Component Name: Consolidation

• Description: The entries that, together with consolidation group-based consolidation entries, turn financial data reported by the consolidation units into consolidated financial data. For example, eliminating entries are posted: Receivables and payables Revenue and expense Profit or loss in transferred assets Profit or loss in inventory These entries are performed on a level of paired consolidation units.

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• Key Concepts: 
  Eliminating entry is a feature of the SAP EC-CS Consolidation component. It is used to eliminate the effect of intercompany transactions between consolidated companies. This ensures that the financial statements of the consolidated companies are accurate and reflect the true financial position of the group. 
  
  How to use it: 
  In order to use eliminating entry, the user must first define the intercompany relationships between the consolidated companies. This is done by setting up a consolidation hierarchy in SAP EC-CS. Once this is done, eliminating entries can be created in order to eliminate the effect of intercompany transactions. 
  
  Tips & Tricks: 
  When creating eliminating entries, it is important to ensure that they are correctly set up and that they are in line with the accounting standards of the group. It is also important to ensure that all intercompany transactions are eliminated in order to ensure accuracy in the financial statements. 
  
  Related Information: 
  For more information on eliminating entries and how to use them in SAP EC-CS Consolidation, please refer to SAP Help documentation or contact your local SAP consultant.