Eliminations

Eliminations are comprised of due to and due from accounts that make up an intercompany transaction. Elimination Sets are processed individually or together as part of the Elimination Process. The Elimination Process calculates and posts active Elimination Entries at Eliminating Companies within your legal entity hierarchy to ensure the proper aggregation of financial information at consolidated reporting levels. For example, a transaction that involves the sale of an item manufactured by a subsidiary to another subsidiary should be eliminated when reporting consolidated results.

When Eliminations are processed, all active Elimination Entries are posted to the Elimination company. Elimination companies are defined during Segment Hierarchy creation. During this process you have the option of defining companies as Elimination Companies. These companies will determine points within the hierarchy where Elimination Entries should be recorded. Consider the example of a regional hierarchy where you have an Americas division, EMEA division and APAC division that all rollup to a Corporate company member. If there are intercompany transactions between two American companies, they will be eliminated at the Americas Elimination company. If there are intercompany transactions that occur between an EMEA and America company, then those intercompany transactions will not be eliminated until the Corporate Elimination.

When there are multiple Elimination companies with a hierarchy, the system decides which Elimination company to use based on Intercompany Segment and the Company.

You can opt to post Eliminations during the Consolidation Process. See the topic called How to Post Eliminations During the Consolidation Process.

1. In the Consolidation Control Panel, under Processes, click Eliminations. The Eliminations grid appears.

2. Click Add. The Add Elimination dialog appears with the Properties tab selected.

3. On the Properties tab, complete the following fields:

   1. Enter a code of your choice in the Code field.

   2. Enter a name in the Name field.

   3. Select the Out of Balance Account to store the differences resulting from intercompany transactions. It is a way to keep a balance sheet in balance. The Out of Balance Account cannot be the same as the Elimination account.

   4. Select the Retain Source Segments checkbox to define the default values that will be applied to out of balance account entries only. That means that Elimination data will be posted to the Elimination Company with other segment members of the inter company transaction. The Elimination Entries that are created by selecting this option will be unique across all other segment member combinations. This is relevant only to segments other than company and the intercompany dimension. If you don't select this checkbox, the Elimination data will populate to the Elimination Company with other segment members selected in the Elimination setup.

4. Click the Elimination Accounts tab, or click Next to navigate to the Elimination Accounts tab, and then set up an Elimination account by following the steps given below:

   1. In the Account box, locate the account, then select the checkbox for account you want to add to the Elimination list. Selecting accounts displays them in the Elimination Accounts grid.

   2. For each added account, select the value from the Due To /From drop-down list. The available values for selection are Due To, Due From, and Not Included . By default, the selected value in the Due To/From drop-down list is Not Included. Select Due To or Due From to generate a variance report.

   3. Enter a number for Maximum Variance Thresholds. Variance thresholds represent the variation bands; coloring schemes for displaying current variances.

5. Click Save. The Elimination Entry is added.

1. In the Consolidation Control Panel, under Processes, click Eliminations. The Eliminations grid appears.

2. Select the Elimination you want to copy.

3. Click Copy. The Copy Elimination dialog appears with the Properties tab selected.

4. Complete all the fields.

5. Click Save.

1. In the Consolidation Control Panel, under Processes, click Eliminations. The Eliminations grid appears.

2. Select an Elimination.

3. Click Edit. The Edit Elimination dialog appears with the Properties tab selected.

4. Edit as needed.

5. Click Save.

You may want to delete unused or inactive Eliminations. When you delete an Elimination, all the associated Elimination accounts are also removed from the Elimination.

1. In the Consolidation Control Panel, under Processes, click Eliminations. The Eliminations grid appears.

2. Select the Elimination.

3. Click Delete.

4. In the confirmation dialog that appears, click OK. The Elimination is deleted.

1. Access the Consolidation Control Panel.

2. Select the Eliminations Process.

3. In the center pane, all Eliminations are displayed. Select the Elimination you want to make inactive.

4. Click the Inactive Action.

When you make an Elimination inactive, the only action available will be “Active”. This is because you can’t perform other actions (such as post or clear data) on an inactive Elimination.

1. Access the Consolidation Control Panel.

2. Select the Eliminations Process.

3. In the center pane, all Eliminations are displayed. Select the inactive Elimination set you want to make active.

4. Click the Active Action.

You can post Eliminations that are active.

1. In the Consolidation Control Panel, under Processes, click Eliminations. The Eliminations grid appears.

2. Select the Elimination, under Entry Actions, click Post. The Elimination Process dialog appears.
   The Scenario is read-only field and indicates that the associated scenario is used when posting an Elimination.

3. Select the fiscal Year by using the calendar icon

4. Select the Period by selecting a month range. You can only post to successive months.

5. Select the E-mail Notification checkbox if you want to send notification about results when the process is complete, and then enter email addresses of recipients you wish to notify.

6. Click Post . The Elimination Process dialog is exited. A message appears indicating that the Elimination is submitted for posting based on the selected periods, and includes a link to navigate to the Detail View for status.

   You can opt to post Eliminations during the Consolidation Process. See the topic called How to Post Eliminations During the Consolidation Process.

1. Access the Consolidation Control Panel.

2. Select the Eliminations Process.

3. In the center pane, all Eliminations are displayed. Select the checkbox to the left of Code as shown below. Notice that only the ACTIVE Eliminations are selected to post

   

4. Click Post.

Organizations may need different Eliminations setup in the main consolidation hierarchy and alternative reporting hierarchies.

To address this need, the Planful application allows the setup for the Eliminations differently for each 'legal entity' segment hierarchy (main and alternate). When you run the Elimination Process, based upon where the Elimination companies are placed in the respective hierarchies, the application will eliminate properly and populate the data against the Elimination companies in each hierarchy.

In Practice

Following is an example of a fictitious company named ABC Inc The Main and Alternate Hierarchy views are shown below for ABC Inc.

Under the Main Hierarchy, there is 'Elim 1&2' (Elimination company) to hold intercompany Eliminations across companies 1&2. Similarly, Elim_corp is there for eliminating the intercompany transactions across the companies 1&2 with either of companies 3&4 or between the companies 3&4.

Under the Alternate Hierarchy view called Division Alternate Hierarchy, you have different Elimination Entries under each division view for companies. In order to support this division level Elimination in the alternate hierarchy, we have 3 different Elimination Entities. These members are to be created in the main hierarchy as leaf level members and are mapped over to the alternate division hierarchy as Elimination Entities.

1. Run Consolidations first - to consolidate all GL Companies

2. Run Eliminations - to eliminate all inter-company transactions

3. Run the Consolidation Process again - to consolidate the Elimination companies

You can clear data in the previously posted Eliminations.

1. In the Consolidation Control Panel, under Processes, click Eliminations. The Eliminations grid appears.

2. Select the Elimination, under Entry Actions, click Clear Data. The Clear Elimination Data dialog appears.

3. The Scenario is read-only field and indicates that the associated scenario is used when posting an Elimination.

4. Select the fiscal Year by using the calendar icon

5. Select the Period by selecting a month range.

6. Select the E-mail Notification checkbox if you want to send notification about results when the process is complete, and then enter email addresses of recipients you wish to notify.

7. Click Clear Data . The Clear Elimination Data dialog is exited. A message appears indicating that the Elimination is submitted for clearing of data based on the selected periods, and includes a link to navigate to the Detail View for status.