Example of Intercompany Balancing Rules
This topic provides examples of intercompany balancing rules and the intercompany balancing lines generated. These rules are used to generate the accounts needed to balance journals that are out of balance by legal entity or primary balancing segment values.
Intercompany Balancing Rules Precedence
In this example the legal Entity InFusion Textiles intercompany manufacturing activities are tracked separately from its non-manufacturing activities. To achieve this, legal entity level rules are defined specifically between the legal entity InFusion Textiles and the two manufacturing legal entities, InFusion Products (East) and InFusion Products (West). A chart of accounts rule is created to cover all other intercompany activities.
Setup
-
InFusion USA Chart of Accounts as shown in this table.
|
Segment Name |
Company (CO) |
Cost Center (CC) |
Division (DIV) |
Account (ACCT) |
Intercompany (IC) |
|---|---|---|---|---|---|
|
Segment Qualifier |
Primary Balancing Segment |
Second Balancing Segment |
Third Balancing Segment |
Account |
Intercompany Segment |
-
Ledger, Legal Entity, Primary Balancing Segment Value Assignments as shown in this table.
|
Ledger |
Legal Entity |
Primary Balancing Segment Value |
|---|---|---|
|
InFusion USA |
InFusion Farms |
3100, 3200, 3300, 3400, 3500 |
|
InFusion USA |
InFusion Textiles |
4000 |
|
InFusion USA |
InFusion Products (East) |
5000 |
|
InFusion USA |
InFusion Products (West) |
6000 |
|
InFusion USA |
1000, 9000 |
-
Chart of Accounts Rule as shown in this table.
|
Rule Number |
Chart of Accounts |
AR Account |
AP Account |
Source |
Category |
Transaction Type |
|---|---|---|---|---|---|---|
|
1 |
InFusion USA Chart of Accounts |
1000 - 000 - 0000 - 13050 - 0000 |
1000 - 000 - 0000 - 21050 - 0000 |
Other |
Other |
None |
-
Legal Entity Level Rule as shown in this table.
|
Rule No. |
From Legal Entity |
To Legal Entity |
AR Account |
AP Account |
Source |
Category |
Transaction Type |
|---|---|---|---|---|---|---|---|
|
2 |
InFusion Textiles |
InFusion Products (West) |
1000 - 000 - 0000 - 13020 - 0000 |
1000 - 000 - 0000 - 21020 - 0000 |
Other |
Other |
None |
|
3 |
InFusion Textiles |
InFusion Products (East) |
1000 - 000 - 0000 - 13030 - 0000 |
1000 - 000 - 0000 - 21030 - 0000 |
Other |
Other |
None |
-
Journal Balancing
-
Journal before Balancing as shown in this table.
-
|
Line |
Line Type |
Legal Entity |
CO |
CC |
DIV |
ACCT |
IC |
Debit |
Credit |
|---|---|---|---|---|---|---|---|---|---|
|
1 |
Expense |
InFusion Farms |
3100 |
100 |
1200 |
52330 |
0000 |
150 |
|
|
2 |
Expense |
InFusion Products (East) |
5000 |
100 |
1200 |
52340 |
0000 |
200 |
|
|
3 |
Expense |
InFusion Products (West) |
6000 |
200 |
1300 |
52345 |
0000 |
300 |
|
|
4 |
Liability |
InFusion Textiles |
4000 |
500 |
1300 |
40118 |
0000 |
650 |
-
Journal Balancing
-
Journal after Balancing as shown in this table.
-
|
Uses Rule |
Line |
Line Type |
Legal Entity |
CO |
CC |
DIV |
ACCT |
IC |
Debit |
Credit |
|---|---|---|---|---|---|---|---|---|---|---|
|
1 |
Expense |
InFusion Farms |
3100 |
100 |
1200 |
52330 |
0000 |
150 |
||
|
2 |
Expense |
InFusion Products (East) |
5000 |
100 |
1200 |
52340 |
0000 |
200 |
||
|
3 |
Expense |
InFusion Products (West) |
6000 |
200 |
1300 |
52345 |
0000 |
300 |
||
|
4 |
Liability |
InFusion Textiles |
4000 |
500 |
1300 |
40118 |
0000 |
650 |
||
|
1 |
5 |
IC AR |
InFusion Textiles |
4000 |
500 |
1300 |
13050 |
3100 |
150 |
|
|
1 |
6 |
IC AP |
InFusion Farms |
3100 |
100 |
1200 |
21050 |
4000 |
150 |
|
|
3 |
7 |
IC AR |
InFusion Textiles |
4000 |
500 |
1300 |
13030 |
5000 |
200 |
|
|
1 |
8 |
IC AP |
InFusion Products(East) |
5000 |
100 |
1200 |
21050 |
4000 |
200 |
|
|
2 |
9 |
IC AR |
InFusion Textiles |
4000 |
500 |
1300 |
13020 |
6000 |
300 |
|
|
1 |
10 |
IC AP |
InFusion Products (West) |
6000 |
200 |
1300 |
21050 |
4000 |
300 |