What is eliminating entry in SAP FI-LC - Consolidation?

SAP Term: eliminating entry

• Component: FI-LC

• Component Name: Consolidation

• Description: The entries that, together with subgroup-dependent consolidating entries, transfer the summarized financial statements into the consolidated financial statements. Eliminating entries are made, for example, for: Payables and receivables Revenue and expense Profit and loss in transferred assets Profit and loss in inventory Eliminating entries are performed on a company pair level.

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• Key Concepts: 
  Eliminating entry is a feature of the FI-LC Consolidation component of SAP. It is used to eliminate the effect of intercompany transactions between consolidated companies. This ensures that the consolidated financial statements accurately reflect the financial position of the group as a whole. 
  
  How to use it: 
  In order to use eliminating entries, you must first set up a consolidation group in SAP. This involves defining the companies that are part of the group and setting up the necessary intercompany relationships. Once this is done, you can then create eliminating entries in SAP. This involves entering the details of the intercompany transactions and specifying how they should be eliminated. 
  
  Tips & Tricks: 
  When creating eliminating entries, it is important to ensure that all intercompany transactions are accounted for. This will ensure that the consolidated financial statements accurately reflect the financial position of the group as a whole. Additionally, it is important to ensure that all eliminating entries are properly documented and approved by management before they are posted in SAP. 
  
  Related Information: 
  For more information on eliminating entries in SAP, please refer to the official SAP documentation on FI-LC Consolidation. Additionally, there are many online resources available which provide detailed instructions on how to set up and use eliminating entries in SAP.