Set Up Intercompany and Interworktag Elimination Rules in AP&C

Create a hierarchy that includes all companies that are part of the consolidation. See Steps: Set Up Companies in AP&C.

Complete ownership details for each company in the company hierarchy. See Set Up Company Ownership Details in AP&C.

Security: Set Up: Consolidation
domain in the Financial Accounting functional area.

In Adaptive Planning and Consolidation (AP&C), you can configure rules for all intercompany and intercompany worktag ledger accounts that you want to eliminate upon consolidation. Workday uses the intercompany affiliate on journal lines to perform the elimination when the company and intercompany affiliate are both in the hierarchy for which you run the report. Eliminations can consist of these relationships:

One to one.

One to many.

Many to one.

These eliminations occur when you run the report and aren't persisted. Workday only performs eliminations on the ledger accounts you configure in the rules.

Example: You can create separate rules to eliminate:

Intercompany receivable and intercompany payable accounts.

Intercompany revenue and intercompany expense accounts.

Interworktag receivable and interworktag payable accounts.

When creating custom reports to eliminate interworktags, ensure that you perform these actions:

For each sub-report, uncheck the

Do Not Prompt at Runtime

option for the

Balancing Worktags

prompt.

When running the custom report, select the

Primary Balancing Worktags

value at the

Balancing Worktags

prompt.

Access the

Maintain Elimination Rules

task.

Select the

Account Set

for which you’re defining elimination rules.

Create 1 or more elimination rules for the account set.

As you complete the

Intercompany/Interworktag

tab, consider:

Option	Description
Elimination Ledger Accounts	Select the consolidation intercompany or interworktag ledger accounts you want to eliminate. Workday only evaluates a ledger account when it has intercompany affiliate worktags on transactions. See Setup Considerations: On-Behalf-of Intercompany Activities. Interworktag affiliate only eliminates for required worktag balancing. Consider the account translation method of the ledger accounts. If you've different translation methods, it can result in translation variances.
Variance Ledger Account	Select the variance accounts to post any out-of-balance amounts to when the intercompany or interworktag ledger accounts don't eliminate on consolidation. Workday recommends that you: Select a different variance ledger account for each elimination rule, to provide more visibility into the intercompany reconciliation process. Don't define intercompany or interworktag accounts as the variance ledger account.

Option

Description

Elimination Ledger Accounts

Select the consolidation intercompany or interworktag ledger accounts you want to eliminate.

Workday only evaluates a ledger account when it has intercompany affiliate worktags on transactions. See Setup Considerations: On-Behalf-of Intercompany Activities.

Interworktag affiliate only eliminates for required worktag balancing.

Consider the account translation method of the ledger accounts. If you've different translation methods, it can result in translation variances.

Variance Ledger Account

Select the variance accounts to post any out-of-balance amounts to when the intercompany or interworktag ledger accounts don't eliminate on consolidation.

Workday recommends that you:

Select a different variance ledger account for each elimination rule, to provide more visibility into the intercompany reconciliation process.

Don't define intercompany or interworktag accounts as the variance ledger account.

Workday calculates and displays the elimination entries in an elimination column on each consolidated financial report, when you select 1 or more of these prompts:

Eliminations Only

Perform Intercompany Eliminations

You can use the

Intercompany Elimination Out of Balance

report to reconcile:

Intercompany accounts in an elimination rule.

Differences with the suspense account in the

Consolidated Trial Balance

report.

Elimination Rule Name	Elimination Ledger Accounts	Variance Ledger Account
Intercompany Management Fee Elimination	4999:Management Fee Revenue 5999:Intercompany Cost of Sales 7999:Management Fee Expense	7900:Other Expenses
Intercompany Pay/Rec Elimination	1900:Intercompany Receivable 2900:Intercompany Payable	1100:Suspense
Investment in Subsidiary, Associate, and Joint Venture	1950:Investment in Sub 1951:Investment in Subsidiary - Current Year Earnings 1952:Investment in Subsidiary - Income Losses 1955:Investment in Associate and Joint Ventures 1956:Investment in Associate and Joint Ventures - Income 1957:Investment in Associate and Joint Ventures - Income Losses 2800:Subsidiary Losses Provision 2805:Associate and Joint Venture Losses Provision 3005:Noncontrolling Interest Equity 3100:Capital Stock 3110:Preferred Stock 3124:APIC Other 3125:Additional Paid in Capital 3300:Retained Earnings - Prior Years 3305:Dividends Declared 3310:Preferred Dividends Declared 3350:Treasury Stock 3410:CTA (FX Reserve) 3450:OCI (Revaluation Surplus) 3500:Unrealized Gain/Loss 8700:Earnings in Subsidiary 8701:Earnings in Associate / Joint Ventur	1101:Suspense Intercompany Payable/Receivable

In this example, we add retained earnings to the elimination rules.

You can report on individual elimination rules using the

Intercompany Elimination Out of Balance Report

When an intercompany affiliate is tagged on an income statement account that isn't in your elimination rules and a roll forward has occurred, the retained earnings an carry that additional intercompany affiliate. This results in more elimination than intended. To resolve this, you can create a reclassing entry of the unwanted intercompany affiliate in the retained earnings account. See Workday Community: Intercompany Elimination Details and Reclassification.