Need help on consoldiation?

[srinivas.oebs]

Hello Friends,

Does any one tel me why do we need to define elmination set during the consolidatin process.

Please expalain with one realy time example.

It is pretty urgent

Regards,
SRINI

[karthikeyanp1981]

Hi Srini,

Elimination sets apply only when you have Inter company transactions.
Whenever you have inter company transactions, there are balancing lines that are generated by the system to make the transaction complete. These balancing lines are completely redundant information when the consolidation happens, hence we need to remove the same ...
You can use elimination sets or create manual journal entry or upload manual journal entry from adi or create recurring journal entry etc ... for those transactions ...

Example,
Parent Company A has some transactions between its Child company B.
Parent company A and Child company B are two seperate balancing segments hence in order to make all debits and credits equal, balancing lines are generated by intercompany rules.
Now, when child company B is going to be consolidated with company A, those lines which are generated only to balance within child company B lost its relevance, hence they are to be eliminated ...

Regards,
Karthikeyan

[srinivas.oebs]

Hi Karthikeyan,

Thank you so much. it is really helpful.

Regards,
Srini