What is elimination of IU profit and loss in transferred inventory in SAP EC-CS - Consolidation?

SAP Term: elimination of IU profit and loss in transferred inventory

• Component: EC-CS

• Component Name: Consolidation

• Description: The elimination of interunit profit or loss incurred from the transfer of inventory assets between two consolidation units within a consolidation group. The IU profit or loss is the difference between the book value on the individual financial statement and the production cost. A positive difference represents IU profit, which is eliminated by making an adjustment with the lower value as viewed by the group. A negative difference represents an IU loss, which is eliminated by making an adjustment using the higher production cost. The elimination of IU profit/loss in transferred inventory requires that the inventory-managing consolidation unit reports which internal trading partner supplied which inventory items.

Smart SAP Assistant

• Key Concepts: 
  Elimination of IU profit and loss in transferred inventory is a feature of the SAP EC-CS Consolidation component. This feature allows companies to eliminate the profit and loss that occurs when transferring inventory between internal units (IUs). This eliminates the need to manually adjust the financial statements of the IUs involved in the transfer. 
  
  How to use it: 
  To use this feature, companies must first enable it in their SAP system. This can be done by navigating to the “Consolidation Settings” tab in the EC-CS Consolidation component and selecting “Enable Elimination of IU Profit and Loss in Transferred Inventory”. Once enabled, companies can transfer inventory between IUs without having to manually adjust their financial statements. 
  
  Tips & Tricks: 
  When transferring inventory between IUs, it is important to ensure that all relevant information is included in the transfer. This includes the quantity, cost, and any other relevant details about the inventory being transferred. This will ensure that the elimination of IU profit and loss is accurate and complete. 
  
  Related Information: 
  For more information on this feature, please refer to SAP’s documentation on EC-CS Consolidation. Additionally, there are many online resources available that provide detailed instructions on how to use this feature.