What is elimination of IU revenue and expense in SAP EC-CS - Consolidation?

SAP Term: elimination of IU revenue and expense

• Component: EC-CS

• Component Name: Consolidation

• Description: A consolidation task that eliminates all revenue and expenses from delivery and service relationships between the units of a consolidated group, according to the single entity theory. SAP uses reclassifications to achieve the regroupings that are also necessary when the period accounting procedure is used sales revenue against changes in stock or other capitalized services. The elimination of revenue and expense is done in unit pairs. Any incurred difference can be broken down by differences caused by different exchange rates currency-related and those because of other causes. It is then posted accordingly.

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• Key Concepts: 
  Elimination of IU revenue and expense is a process in the EC-CS Consolidation component of SAP that eliminates intercompany transactions between consolidated entities. This process ensures that the consolidated financial statements accurately reflect the financial position of the group as a whole, without double-counting any transactions. 
  
  How to use it: 
  In order to use this process, users must first set up the consolidation structure in SAP. This includes defining the parent company, subsidiaries, and any other related entities. Once this is done, users 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 sales and purchases, as well as any other related transactions. Additionally, it is important to ensure that all elimination entries are properly posted to the correct accounts in order to ensure accurate financial reporting. 
  
  Related Information: 
  For more information on setting up and using the elimination of IU revenue and expense process 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 and use this process.