What is simplification of elimination in SAP FI-LC - Consolidation?

SAP Term: simplification of elimination

• Component: FI-LC

• Component Name: Consolidation

• Description: This sort of simplification often occurs when eliminating intercompany IC revenue and expense. Owing to the few balance sheet items, the reported consolidation data can be reconciled very accurately. However, profit and loss can involve many more items in the income statement. To simplify this, you can perform one-sided eliminations. That is, the elimination is based on the data of only one company. &EXAMPLE& The cost of sales for companies A and B is eliminated, each on the basisof the sales of the other company. In this case, there are no elimination differences.

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• Key Concepts: 
  FI-LC Consolidation simplification of elimination is a process that allows companies to eliminate intercompany transactions from their financial statements. This process is used to ensure that the financial statements accurately reflect the company’s financial position. The process involves eliminating the intercompany transactions from the consolidated financial statements, which can be done manually or through automated software. 
  
  How to use it: 
  The simplification of elimination process can be done manually or through automated software. When done manually, the process involves identifying and eliminating intercompany transactions from the consolidated financial statements. When done through automated software, the process is much simpler and faster. The software will identify and eliminate intercompany transactions from the consolidated financial statements automatically. 
  
  Tips & Tricks: 
  When using automated software for simplification of elimination, it is important to ensure that the software is up-to-date and that all intercompany transactions are accurately identified and eliminated. Additionally, it is important to review the consolidated financial statements after the simplification of elimination process has been completed to ensure accuracy. 
  
  Related Information: 
  The simplification of elimination process is an important part of preparing accurate consolidated financial statements. It is important to understand how this process works in order to ensure that the financial statements accurately reflect the company’s financial position. Additionally, understanding how to use automated software for simplification of elimination can help streamline the process and make it more efficient.