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Elimination entries

When companies are consolidated, balances and transactions between them are removed so the group reports only what it owes, owns and earns with outside parties. Those removals are elimination entries.

Where eliminations live

Elimination entries exist only at the group level. They are never written back to any company's QuickBooks Online file, because they have no meaning in a single company's books: each company's receivable or sale to its sister company is real in its own ledger. The same applies to the translation adjustment and other consolidation-only entries.

What is eliminated

Every intercompany pair you have confirmed is eliminated wherever a consolidated figure is shown: the consolidated income statement in Analysis, the Briefing, forecasts and report packages, and the consolidated balance sheet in report packages. A balance-sheet pair, such as a receivable and the matching payable, removes both balances. A sales and purchases pair, such as a management fee, removes both sides of the month. Each side is removed at the rate the group translated that company at. See Intercompany reconciliation for confirming pairs.

When the two sides do not agree

• The difference is shown as its own line, Intercompany difference, rather than hidden in a total, so group profit and the balance sheet stay whole and the difference is there to resolve.
• A side the other company has not booked yet is eliminated as it stands, and the whole amount shows as the difference.
• A pair with one side on the income statement and the other on the balance sheet, or a company with no exchange rate for the month, is not eliminated, and the statement says which.

Always current

Eliminations are worked out from the confirmed pairs each time a consolidated statement is built, so a change to a company's books after a consolidation run is reflected, never left behind in a stale entry. The statement notes how many pairs were eliminated.

The consolidation run

• A group is consolidated for a period once every member company's period is closed or locked. If one is still open, the run stops and names it.
• The run posts the period's translation adjustment for members in another currency, and is recorded. See The translation adjustment.
• On the consolidated balance sheet, equity is at historical rates and the translation adjustment is its own line.

Partly owned companies are covered in Non-controlling interests.

More in Consolidation

• Intercompany reconciliation
• Non-controlling interests
• The translation adjustment (CTA)
• Foreign currency across a group

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