ar

[segu_tulasi55]

what is intercomany in ar?

[SIVAKUMAR_G]

Hi

For example if there is a company in Singapore and a Subsidiary in Malaysia and they are having separate set of books. The Subsidiary Company receives a Sales order from a Customer. The required materials are available only with Singapore Company. The singapore company despatches the goods to Malaysian Company to be sold to the Customer. This creates Intercompany Transaction between Singapore Company and Malaysian Company.

In case of Singapore company it creates following entry

Intercompany Receivables a/c Dr
Intercompany Revenue a/c Cr

In case of Malaysian Company it creates following accounting entry

Intercompany Purchases a/c Dr
Intercompany Payables a/c Cr

Hope this helps

Regards
Sivakumar