Intercompany Settlements
If your organization has transactions between companies, the companies will be out of balance unless you create and post intercompany balancing entries. You create intercompany settlements to ensure that each company's net balance equals zero (that is, debits equal credits). You can either create these settlements yourself or have the system create them automatically. You can choose from these methods of intercompany settlements:
Hub method
Detail method
Configured hub method
When you post transactions using one of these methods, the system creates journal entries for intercompany settlements based on automatic accounting instructions (AAIs). Two AAI items exist for intercompany settlements. Depending on the method that you choose, you must set up one or both of the AAIs.
The system tracks settlements through subledgers. Each company that is involved in an intercompany settlement has an automatic offset to the appropriate intercompany account with the subledger equal to the address book number of the offsetting company. The system uses the subledger field to record the other company that is involved in the transaction. The subledger type is A (address book), and the companies must be set up in the JD Edwards EnterpriseOne Address Book system.
It is recommended that you manually reconcile intercompany settlements on a periodic basis. To do this, run the Companies in Balance and Intercompany Accounts in Balance integrity reports.
If your organization uses multiple currencies, you must use either the detail or configured hub method for intercompany settlements.