What is elimination of IC payables & receivables in SAP FI-LC - Consolidation?

SAP Term: elimination of IC payables & receivables

• Component: FI-LC

• Component Name: Consolidation

• Description: A consolidation activity that eliminates group-internal receivables intercompany, or IC and payables. The terms, payables and receivables,are far reaching. For instance, they also encompass bonds, loans, appropriations, accruals and deferrals, unearned revenue, and so on, as long they are based on group-internal relationships. From the group's point of view, the consolidated balance sheet may only include payables to and receivables from companies outside of the group, or companies that are not consolidated. If the valuations of the group-internal debt or receivable items differ between the two companies, a difference occurs during their elimination. The elimination difference can be posted with or without affecting net income.

Smart SAP Assistant

• Key Concepts: 
  Elimination of IC payables & receivables is a process in the FI-LC Consolidation component of SAP that allows companies to eliminate intercompany payables and receivables from their financial statements. This process is used to ensure that the financial statements accurately reflect the company’s financial position. 
  
  How to use it: 
  In order to use this process, companies must first set up the FI-LC Consolidation component in SAP. This includes setting up the necessary accounts and defining the rules for eliminating intercompany payables and receivables. Once this is done, companies can then use the elimination process to remove any intercompany payables and receivables from their financial statements. 
  
  Tips & Tricks: 
  When setting up the FI-LC Consolidation component, it is important to ensure that all accounts are properly configured and that all rules are properly defined. This will help ensure that the elimination process runs smoothly and accurately. Additionally, it is important to regularly review the accounts and rules to ensure that they are still valid and up-to-date. 
  
  Related Information: 
  For more information on setting up and using the FI-LC Consolidation component, please refer to SAP’s official documentation. Additionally, there are many online resources available that provide helpful tips and tricks for using this component.