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

SAP Term: elimination of IC profit/loss in inventory

• Component: FI-LC

• Component Name: Consolidation

• Description: An object in inventory that requires that the inventory-managing consolidation unit reports which internal trading partner supplied which inventory items. The IC profit or loss is the difference between the book value on the individual financial statement and the production cost. A positive difference represents intercompany profit, which is eliminated by making an adjustment down to the lower value, in accordance with the group's point of view. A negative difference represents an intercompany loss, which is eliminated by making an adjustment up to the higher production cost.

Smart SAP Assistant

• Key Concepts: 
  Elimination of IC profit/loss in inventory is a feature of the FI-LC Consolidation component of SAP. This feature allows companies to eliminate any profit or loss that is generated from intercompany transactions when inventory is transferred between two companies. This ensures that the financial statements of both companies are accurate and up-to-date. 
  
  How to use it: 
  In order to use this feature, companies must first set up the FI-LC Consolidation component in SAP. This involves setting up the necessary accounts and mapping them to the appropriate intercompany transactions. Once this is done, the elimination of IC profit/loss in inventory can be enabled. This will allow companies to automatically eliminate any profit or loss generated from intercompany transactions when inventory is transferred between two companies. 
  
  Tips & Tricks: 
  It is important to ensure that all accounts and transactions are properly mapped before enabling the elimination of IC profit/loss in inventory. This will ensure that all profits and losses are accurately eliminated and that the financial statements of both companies remain accurate and up-to-date. 
  
  Related Information: 
  For more information on how to set up the FI-LC Consolidation component in SAP, please refer to the official SAP documentation. Additionally, there are many online resources available that provide detailed instructions on how to set up and use this feature.