What is elimination of investment income in SAP EC-CS - Consolidation?

SAP Term: elimination of investment income

• Component: EC-CS

• Component Name: Consolidation

• Description: The elimination of dividends received by an investor against the dividends distributed by its investee. If there is a profit transfer agreement, this term means the elimination of revenue and expense incurred by the transfer of profit.

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• Key Concepts: 
  Elimination of investment income is a process used in the EC-CS Consolidation component of SAP to remove the effects of intercompany investments from the consolidated financial statements. This process is used to ensure that the consolidated financial statements accurately reflect the financial position of the group as a whole, rather than the individual companies. 
  
  How to use it: 
  In order to eliminate investment income, the EC-CS Consolidation component of SAP must be used. This component allows users to enter the details of each intercompany investment, such as the amount invested and the rate of return. Once this information is entered, SAP will automatically calculate the amount of investment income that needs to be eliminated from the consolidated financial statements. 
  
  Tips & Tricks: 
  When entering intercompany investments into SAP, it is important to ensure that all relevant information is included. This includes not only the amount invested and rate of return, but also any other relevant details such as currency exchange rates and tax implications. This will ensure that the elimination of investment income is calculated accurately. 
  
  Related Information: 
  The elimination of investment income is just one part of the consolidation process in SAP. Other processes such as currency translation and consolidation adjustments must also be completed in order to produce accurate consolidated financial statements.