What is contra item in SAP FI-LC - Consolidation?

SAP Term: contra item

• Component: FI-LC

• Component Name: Consolidation

• Description: The data transmitted to the system automatically can cause the balance of certain financial statement items to be reversed, making it necessary to show the value on the other side of the balance sheet. Within a consolidation chart of accounts, you can assign to such FS items an FS item of the other side of the balance sheet, a so-called contra item.

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• Key Concepts: 
  A contra item is a type of transaction in the FI-LC Consolidation component of SAP. It is used to offset the value of a transaction in one account with the value of a transaction in another account. This allows for the net value of both accounts to be zero. 
  
  How to use it: 
  Contra items are used when two accounts need to be balanced out. For example, if an account has a debit balance and another account has a credit balance, a contra item can be used to offset the two balances and make them both zero. To create a contra item, enter the debit amount in one account and the credit amount in the other account. 
  
  Tips & Tricks: 
  When creating a contra item, make sure that the debit and credit amounts are equal. This will ensure that both accounts are balanced out correctly. Additionally, it is important to double-check that the accounts being balanced out are correct before creating the contra item. 
  
  Related Information: 
  Contra items are similar to journal entries, which are also used to balance out accounts. However, journal entries require more information than contra items, such as an explanation for why the entry is being made. Additionally, journal entries can be used to transfer funds between different accounts, while contra items can only be used to offset balances within the same account.