What is elimination of intercompany revenue and expense in SAP FI-LC - Consolidation?

SAP Term: elimination of intercompany revenue and expense

• Component: FI-LC

• Component Name: Consolidation

• Description: A consolidation activity in which all revenue and expenses from delivery and service relationships between the companies of a consolidated group are eliminated according to the single entity theory. The regroupings that are also necessary when the period accounting procedure is used sales revenue against changes in stock or other capitalized services are realized in as reclassifications. The elimination of revenue and expense is done in company pairs; a possible difference can be analyzed according to differences caused by different exchange rates or other causes, and then posted.

Smart SAP Assistant

• Key Concepts: 
  Elimination of intercompany revenue and expense is a process used in SAP FI-LC Consolidation to remove the effects of transactions between related companies. This process is used to ensure that the consolidated financial statements accurately reflect the financial position of the group as a whole. 
  
  How to use it: 
  In SAP FI-LC Consolidation, elimination of intercompany revenue and expense is done by creating an elimination journal entry. This journal entry will offset the intercompany transactions and ensure that the consolidated financial statements are accurate. The journal entry should be created in the consolidation system and then posted to the general ledger. 
  
  Tips & Tricks: 
  When creating an elimination journal entry, it is important to ensure that all of the necessary information is included. This includes the company codes, accounts, amounts, and any other relevant information. Additionally, it is important to ensure that the journal entry is posted correctly so that it does not affect any other transactions in the system. 
  
  Related Information: 
  For more information on elimination of intercompany revenue and expense in SAP FI-LC Consolidation, please refer to SAP Help documentation or contact your local SAP consultant.