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Adaptive Planning
Last Updated: 2023-06-23
Example: Use Splits to Eliminate Intercompany Transactions

Example: Use Splits to Eliminate Intercompany Transactions

This example illustrates how to resolve transactions between related companies by eliminating intercompany transactions using the splits method with the Consolidation capability.
Parent Company is a level with 2 child levels: Company A and Company B, which represent subsidiaries of Parent Company. For the Current Budget version, you want to enter a $4,000 transaction for January 2023 that Company A paid Company B. You want the transaction eliminated at the Parent Company level.
You track transactions in the
Intercompany Transaction
 sheet. The accounts are in the rows and the levels are in the
Levels
 drop-down prompt in the toolbar. For the splits method, your standard sheet has the
Trading Partner
 dimension in the second column of the sheet. In the rows are these general ledger accounts:
  • Accounts Payable
    , which rolls up to
    Liabilities
    , a credit account.
  • Accounts Receivable
    , which rolls up to
    Assets
    , a debit account.
For the splits method, when you enter intercompany data, you must enter an amount in the credit account and the corresponding amount in debit account. Then you tag the data with the appropriate
Trading Partner
 dimension value. Any differences between the credit and debit are held automatically in a system difference account.
  1. Select
    Sheets
     from the main menu.
  2. To open the sheet, click
    Intercompany Transactions
    .
  3. From the version prompt in the top menu, select
    Current Budget
    .
  4. From the
    Levels
     prompt, select
    Company A
    .
    You first enter the transaction for Company A as the paying partner.
  5. From the cell that corresponds to
    January 2023
     and
    Accounts Payable
    , right-click the cell and select
    Add Split
    .
  6. For
    Split Name
    , enter
    Paid to Co B
    .
  7. Click
    OK
    .
    This step creates a new row, or split, for
    Paid to Co B
    . The split rolls up to
    Accounts Payable
    .
  8. In the cell that corresponds to
    Paid to Co B
     and
    January 2023
    , enter
    4000
    .
  9. From the
    Trading Partner
     column in the same row, select
    Company B
    .
    This step connects Company A and Company B as trading partners for the transaction.
    The sheet looks like this:
    Levels
    :
    Company A
    Accounts
    Trading Partner
    January 2023
    Liabilities
    -Accounts Payable
    – Paid to Co B
    Company B
    4,000
    Assets
  10. From the toolbar, click
    Save
    .
  11. From the
    Level
     prompt, select
    Company B
    .
    You now enter the corresponding transaction for Company B as the receiving partner.
  12. From the cell that corresponds to
    January 2023
     and
    Accounts Receivable
    , right-click and select
    Add Split
    .
  13. For
    Split Name
    , enter
    Rc'd from Co A
    .
  14. Click
    OK
    .
    This step creates a new row, or split, for
    Rc'd from Co A
    . The split rolls up to
    Accounts Receivable
    .
  15. In the cell that corresponds to
    Rc'd from Company A
     and
    January 2023
    , enter
    4000
    .
  16. From the
    Trading Partner
     column in the same row, select
    Company A
    .
    This step connects Company A and Company B as trading partners for the transaction.
    The sheet looks like this:
    Levels
    :
    Company B
    Accounts
    Trading Partner
    January 2023
    Liabilities
    Assets
    -Accounts Receivable
    --Re'd from Co A
    Company A
    4,000
  17. From the toolbar, click
    Save
    .
The transaction of 4,000 doesn't contribute to
Accounts Receivable
 or
Accounts Payable
 accounts at the Parent Company level.
You can either: