Use this screen to create elimination entries for the consolidating (receiving) company. Elimination entries are journal entries that eliminate duplicate revenue, expenses, receivables, and payables. These duplications occur as the result of intercompany work for which the sending and receiving companies both recognize the same effort. Both entities correctly recognize the revenue, expenses, receivables, and payables on their respective company financial statements but, at the consolidated level, these amounts are duplicates and must be eliminated. Elimination journal entries are calculated on a year-to-date basis and are reversing. This means that elimination entries created in the final period of the fiscal year are reversed in the first period of the next fiscal year.

Do not post the reversal amounts to income statement accounts (in case the elimination entry contains these types of accounts). Either edit the reversal elimination entry or enter a separate journal entry to remove these income statement amounts.

The receiving company should execute this process after the consolidation entry has been posted. Elimination accounts must be already set up in the receiving company and be assigned to the financial statement lines that require elimination.