What is elimination of IC profit and loss in SAP FI-LC - Consolidation?

SAP Term: elimination of IC profit and loss

• Component: FI-LC

• Component Name: Consolidation

• Description: The intercompany IC profits or losses that can occur require elimination, when assets are transferred from one internal trading partner to another. The elimination of IC profit and loss applies to business transactions that affect transferred assets as well as inventory.

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• Key Concepts: 
  Elimination of IC Profit and Loss is a feature of the FI-LC Consolidation component of SAP. It allows for the elimination of intercompany profits and losses between consolidated companies. This eliminates the need to manually adjust the financial statements of each company to reflect the true financial position of the group. 
  
  How to use it: 
  In order to use this feature, you must first set up the consolidation structure in SAP. This includes defining the parent company, subsidiary companies, and any other related entities. Once this is done, you can then configure the elimination of IC Profit and Loss. This includes setting up the elimination rules, such as which accounts should be eliminated and how they should be eliminated. 
  
  Tips & Tricks: 
  When setting up the elimination rules, it is important to ensure that all accounts are properly mapped and that all transactions are correctly eliminated. This will ensure that the financial statements accurately reflect the true financial position of the group. Additionally, it is important to regularly review and update the elimination rules as needed to ensure accuracy. 
  
  Related Information: 
  For more information on setting up and using Elimination of IC Profit and Loss in SAP FI-LC Consolidation, please refer to SAP Help documentation or contact your local SAP consultant.