Intercompany journal

gemini_shooter

Hello everyone,

I am setting up intercompany for the first time but had ONE question:

1. Allocating Expenses across companies

1a. I created a purchase invoice for utility expense $100 in Company A and posted it.
1b. I want to allocate 10% of that expense to Company B.
1c. I went to the IC general journal and entered the entry in the journal

1d. Entry created is:

Utility expense $10 (CR)
AR - Intercompany $10 (DR)

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IN COMPANY B

1e. Entry Created is:

Utility expense $10 (DR)
AP - Intercompany $10 (CR)

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NOW I WANT TO CLOSE THIS AP & AR

I want to pass the following entry:

(Company A) AR - Intercompany $10 (CR)
(Company AP - Intercompany $10 (DR)

This will close the AR in company A against AP in company B.

Is this correct according to GAAP?
If yes, is this possible in Navision?

AlexWiley

gemini_shooter wrote:

Hello everyone,

NOW I WANT TO CLOSE THIS AP & AR

I want to pass the following entry:

(Company A) AR - Intercompany $10 (CR)
(Company AP - Intercompany $10 (DR)

This will close the AR in company A against AP in company B.

Is this correct according to GAAP?
If yes, is this possible in Navision?

Isn't this just an intercompany elimination?

gemini_shooter

Yes, it is ... I am wondering if I can do it in individual entities before I consolidate.

AlexWiley

You either have to use the IC Elimination batch job or consolidate the entries to an elimination company to do them- Navision doesn't allow one sided entries. Every accountant I have worked with has chosen to use an elimination company because they feel more comfortable doing it manually. I have never actually had an accountant review the actions of the batch job.

gemini_shooter

Thanks ... that was a lot of help ... I get the concept now.