Intercompany Elimination - how BI helps to reduce manual workload

When preparing or combining consolidated balance sheet,routine manual finance task is required to deduct the intercompany items between a parent and its subsidiary. This can be done either through manual adjustment (by manual entries) or through dummy account posting.

However, there is a feature in BI that allows this deduction to be done automatically. It uses the elimination feature in the key figure infoobject (SAP reference). The elimination is by each characteristic pairs or done via start routine in the transformation for a more complex approach such as elimination at parent-child level (Intercompany elimination). The elimination figures is calculated in a separate flow and consolidated in the financial multiprovider for reporting.In a global environment, the different regions must have the standard and consistent master data that is referred to during the elimination such product (SKU) , selling business unit and buying business unit.

The business rules behind intercompany elimination:
1) IC sales -done as soon as data available in BI(dynamic) for the following account:

• Internal Net Turnover
• Bought in Goods
• Primary Supply Chain Cost

2) IC margin -done monthly
3) Profit in stock (involve IC margin and sales volume) - done monthly.Eg:

• 6 month rolling IC margin in June will be based on Jan-June IC Margin / Jan-June IC Sales volume
• 6 month rolling IC margin in July will be based on Feb-July IC Margin / Feb-July IC Sales volume

4) There are 2 types of elimination:

• Intracompany Elimination

BI will eliminate when the BU/Entity has an identical corresponding Partner BU/ Partner Entity

• Intercompany Elimination

BI will eliminate when the BU/Entity and the corresponding Partner BU/ Partner Entity
belong to the same level of the market hierarchy (eg. same End Market, Cluster, Zone, Area or Region)