What is elimination of IU payables and receivables in SAP EC-CS - Consolidation?

SAP Term: elimination of IU payables and receivables

• Component: EC-CS

• Component Name: Consolidation

• Description: The elimination of group-internal interunit receivables and payables. The terms "payables" and "receivables" are rather broad. The terms encompass accounts receivable and payable from trade and services, bonds, loans, appropriations, accruals or deferrals,and unearned revenue, as long as they are based on group-internal relationships. From the group's point of view, the consolidated balance sheet may include only payables to and receivables from consolidation units outside of the group, or units that are not consolidated. If the valuations of the group-internal debt or receivable items differ between the two consolidation units, a difference occurs during their elimination. The elimination difference can be posted with or without an effect on net income.

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• Key Concepts: 
  Elimination of IU payables and receivables is a process in the SAP EC-CS Consolidation component that allows companies to eliminate intercompany transactions between consolidated entities. This process is used to ensure that the consolidated financial statements accurately reflect the true financial position of the company. 
  
  How to use it: 
  In order to use this process, companies must first set up their consolidation structure in SAP EC-CS. This includes defining the parent company, subsidiaries, and any other related entities. Once this is done, companies can then set up the elimination rules for each entity. These rules will determine which transactions should be eliminated and how they should be eliminated. 
  
  Tips & Tricks: 
  When setting up the elimination rules, it is important to ensure that all transactions are properly accounted for. This includes both intercompany payables and receivables. Additionally, it is important to ensure that all transactions are eliminated in the same currency in order to avoid any discrepancies in the consolidated financial statements. 
  
  Related Information: 
  For more information on setting up elimination of IU payables and receivables in SAP EC-CS Consolidation, please refer to the official SAP documentation. Additionally, there are many online resources available that provide step-by-step instructions on how to set up this process.