Examples of Using Chart of Accounts Rules for Intercompany Balancing
The following are some examples using chart of accounts rules for Intercompany balancing.
One-to-One Balancing: Example
In these scenarios, you choose to track intercompany balancing for companies with values 3000, and 4000 to separate intercompany accounts. You will set up specific rules at the primary balancing segment value level for this. A chart of accounts rule is created for all other intercompany activity.
Setup
InFusion USA Chart of Accounts as shown in the following table.
|
Segment Qualifier |
Primary Balancing Segment |
Balancing Segment 2 |
Segment |
Segment |
Intercompany Segment |
|---|---|---|---|---|---|
|
Segment Name |
Company (CO) |
Cost Center (CC) |
Product (PROD) |
Account (ACCT) |
Intercompany (IC) |
Ledger, Legal Entity, and Primary Balancing Segment Value Assignments as shown in the following table.
|
Ledger |
Legal Entity |
Primary Balancing Segment Value |
|---|---|---|
|
InFusion USA |
InFusion Farms |
3000 |
|
InFusion USA |
InFusion Textiles |
4000 |
|
InFusion USA |
InFusion Production |
5000 |
|
InFusion USA |
1000, 9000 |
Rule No. 1: Chart of Accounts Rule as shown in the following table.
-
Chart of Accounts: InFusion USA
-
Source: Other
-
Category: Other
-
Transaction Type: None
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
1000 |
000 |
0000 |
13010 |
0000 |
|
AP Account |
1000 |
000 |
0000 |
21010 |
0000 |
Rule No. 2: Primary Balancing Segment Rules as shown in the following table.
-
From Ledger and To Ledger: InFusion USA
-
From Primary Segment Value: 3000
-
To Primary Segment Value: 4000
-
Source: Other
-
Category: Other
-
Transaction Type: None
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
1000 |
000 |
0000 |
13011 |
0000 |
|
AP Account |
1000 |
000 |
0000 |
21011 |
0000 |
Rule No. 3: Primary Balancing Segment Rule as shown in the following table.
-
From Ledger and To Ledger: InFusion USA
-
From Primary Segment Value: 3000
-
To Primary Segment Value: 5000
-
Source: Other
-
Category: Other
-
Transaction Type: None
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
1000 |
000 |
0000 |
13012 |
0000 |
|
AP Account |
1000 |
000 |
0000 |
21012 |
0000 |
Rule No. 4: Primary Balancing Segment Rule as shown in the following table.
-
From Ledger and To Ledger: InFusion USA
-
From Primary Segment Value: 4000
-
To Primary Segment Value: 3000
-
Source: Other
-
Category: Other
-
Transaction Type: None
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
1000 |
000 |
0000 |
13013 |
0000 |
|
AP Account |
1000 |
000 |
0000 |
21013 |
0000 |
Rule No. 5: Primary Balancing Segment Rule as shown in the following table.
-
From Ledger and To Ledger: InFusion USA
-
From Primary Segment Value: 4000
-
To Primary Segment Value: 5000
-
Source: Other
-
Category: Other
-
Transaction Type: None
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
1000 |
000 |
0000 |
13014 |
0000 |
|
AP Account |
1000 |
000 |
0000 |
21014 |
0000 |
Journal No. 1: One-to-One Legal Entity Journal as shown in the following table.
-
Source: Manual
-
Category: Adjustment
|
Line |
Account |
Debit |
Credit |
Description |
Uses Rule No. |
|---|---|---|---|---|---|
|
1 |
5000- 100- 1200- 52330- 0000 |
150 |
|||
|
2 |
4000- 110- 1200- 41111- 0000 |
150 |
|||
|
3 |
5000- 100- 0000- 21010- 4000 |
150 |
Intercompany Balancing Line |
1 |
|
|
4 |
4000- 110- 0000- 13014- 5000 |
150 |
Intercompany Balancing Line |
5 |
Journal No. 2: One-to-Many Legal Entity with Multiple Primary Balancing Segment Values for a legal Entity as shown in the following table.
-
Source: Manual
-
Category: Adjustment
|
Line |
Account |
Debit |
Credit |
Description |
Uses Rule No. |
|---|---|---|---|---|---|
|
1 |
3000-100-1200- 52330- 0000 |
150 |
|||
|
2 |
4000-110-1200- 41111- 0000 |
140 |
|||
|
3 |
1000-120-1000- 52345-0000 |
30 |
|||
|
4 |
9000-130-2000- 52330-0000 |
40 |
|||
|
5 |
3000- 100- 0000- 21011- 4000 |
140 |
Intercompany Balancing Line |
2 |
|
|
6 |
4000- 110- 0000- 13013- 3000 |
140 |
Intercompany Balancing Line |
4 |
|
|
7 |
3000-100-0000- 21010-1000 |
10 |
Intercompany Balancing Line |
1 |
|
|
8 |
1000-120-0000- 13010-3000 |
10 |
Intercompany Balancing Line |
1 |
|
|
9 |
1000-120-0000- 21010-9000 |
40 |
Ledger Intercompany Balancing Line |
1 |
|
|
10 |
9000-130-0000- 13010-1000 |
40 |
Ledger Intercompany Balancing Line |
1 |
Many-to-Many Balancing: Example
In this section, we look at many-to-many primary balancing segment value journals and many-to-many legal entity journals.
-
For many-to-many primary balancing segment journals, a clearing company is used if it is available. If no clearing company is available, balancing is done using a default rule that matches the largest debit with largest credit and so on.
-
For many-to-many legal entity journals, a clearing company is required to balance a journal.
Setup
InFusion USA Chart of Accounts as shown in the following table.
|
Segment Qualifier |
Primary Balancing Segment |
Balancing Segment 2 |
Segment |
Segment |
Intercompany Segment |
|---|---|---|---|---|---|
|
Segment Name |
Company (CO) |
Cost Center (CC) |
Product (PROD) |
Account (ACCT) |
Intercompany (IC) |
Ledger, Legal Entity, and Primary Balancing Segment Value Assignments as shown in the following table.
|
Ledger |
Legal Entity |
Primary Balancing Segment Value |
|---|---|---|
|
InFusion USA |
InFusion Farms |
3111, 3121, 3199, 3899 |
|
InFusion USA |
InFusion Textiles |
3311 |
|
InFusion USA |
InFusion Production |
3211 |
|
InFusion USA |
InFusion Sales |
3251 |
Many-to-Many Primary Balancing Segment Values Within One Legal Entity Balanced Using a Clearing Company: Example
Rule No. 1: Chart of Accounts as shown in the following table.
-
Chart of Accounts: InFusion USA
-
Source: Auto copy
-
Category: Accrual
-
Transaction Type: None
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
3111 |
000 |
0000 |
11020 |
0000 |
|
AP Account |
3251 |
000 |
0000 |
21021 |
0000 |
Rule No. 2: Primary Balancing Segment Rule as shown in the following table.
-
Chart of Accounts: InFusion USA
-
From Primary Segment Value: 3111
-
To Primary Segment Value: All other
-
Source: Auto copy
-
Category: Accrual
-
Transaction Type: None
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
3111 |
000 |
0000 |
11018 |
0000 |
|
AP Account |
3111 |
000 |
0000 |
21030 |
0000 |
Additional Intercompany Balancing and Clearing Options as shown in the following table.
-
Source: Auto copy
-
Category: Accrual
Journal Lines
|
Line |
Account |
Debit |
Credit |
Description |
Uses Rule No. |
|---|---|---|---|---|---|
|
1 |
3111-000-000- 52330-0000 |
10 |
|||
|
2 |
3121-000-000- 52330-0000 |
20 |
|||
|
3 |
3199-000-000- 52330-0000 |
14 |
|||
|
4 |
3899-000-000- 52330-0000 |
16 |
|||
|
5 |
3199-000-000- 11020-3371 |
14 |
Ledger Intercompany balancing line |
1 and clearing company value 3371 |
|
|
6 |
3371-000-000- 21021-3199 |
14 |
Ledger Intercompany balancing line |
1 and clearing company value 3371 |
|
|
7 |
3111-000-000- 21030-3371 |
10 |
Ledger Intercompany balancing line |
2 and clearing company value 3371 |
|
|
8 |
3371-000-000- 11020-3111 |
10 |
Ledger Intercompany balancing line |
1 and clearing company value 3371 |
|
|
9 |
3121-000-000- 21021-3371 |
20 |
Ledger Intercompany balancing line |
1 and clearing company value 3371 |
|
|
10 |
3371-000-000- 11020-3121 |
20 |
Ledger Intercompany balancing line |
1 and clearing company value 3371 |
|
|
11 |
3899-000-000- 11020-3371 |
16 |
Ledger Intercompany balancing line |
1 and clearing company value 3371 |
|
|
12 |
3371-000-000- 21021-3899 |
16 |
Ledger Intercompany balancing line |
1 and clearing company value 3371 |
|
|
90 |
90 |
Many-to-Many Legal Entity with a Clearing Company: Example
Rule No. 1: Chart of Accounts Rule as shown in the following table.
-
Chart of Accounts: InFusion USA
-
Source: Other
-
Category: Other
-
Transaction Type: None
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
3111 |
000 |
0000 |
11020 |
0000 |
|
AP Account |
3251 |
000 |
0000 |
21021 |
0000 |
Additional Intercompany Balancing and Clearing Options as shown in the following table.
-
Source: Auto copy
-
Category: Accrual
|
Condition |
Source |
Value |
|---|---|---|
|
Use clearing company for all many-to-many journal |
Default clearing balancing segment value |
3899 |
Journal Lines
|
Line |
Account |
Debit |
Credit |
Description |
Uses Rule No. |
|---|---|---|---|---|---|
|
1 |
3111-000-000- 52330-0000 |
10 |
|||
|
2 |
3311-000-000- 52330-0000 |
20 |
|||
|
3 |
3211-000-000- 52330-0000 |
14 |
|||
|
4 |
3251-000-000- 52330-0000 |
16 |
|||
|
5 |
3111-000-000- 21021-3899 |
10 |
Ledger Intercompany balancing line |
1 and clearing company 3899 |
|
|
6 |
3211-000-000- 11020-3899 |
14 |
Ledger Intercompany balancing line |
1 and clearing company 3899 |
|
|
7 |
3251-000-000- 11020-3899 |
16 |
Ledger Intercompany balancing line |
1 and clearing company 3899 |
|
|
8 |
3311-000-000- 21021-3899 |
20 |
Ledger Intercompany balancing line |
1 and clearing company 3899 |
|
|
9 |
3899-000-000- 11020-3111 |
10 |
Ledger Intercompany balancing line |
1 and clearing company 3899 |
|
|
10 |
3899-000-000- 21021-3211 |
14 |
Ledger Intercompany balancing line |
1 and clearing company 3899 |
|
|
11 |
3899-000-000- 21021-3251 |
16 |
Ledger Intercompany balancing line |
1 and clearing company 3899 |
|
|
12 |
3899-000-000- 11020-3311 |
20 |
Ledger Intercompany balancing line |
1 and clearing company 3899 |
|
|
90 |
90 |
Many-to-Many Primary Balancing Segment within a Legal Entity and No Clearing Company Specified: Example
The default rule is used which applies largest debit to largest credit and so on.
Rule No. 1: Chart of Accounts Rule as shown in the following table.
-
Chart of Accounts: InFusion USA
-
Source: Other
-
Category: Other
-
Transaction Type: None
|
IC Account |
CO |
CC |
PROD |
ACCT |
IC |
|---|---|---|---|---|---|
|
AR Account |
3111 |
000 |
0000 |
13011 |
0000 |
|
AP Account |
3111 |
110 |
0000 |
21081 |
0000 |
Balancing will take the line with the largest debit which is line number 2 and balance it against the largest credit which is line 4. Then it takes the balance of line 2 and balance this against line 3 and so on.
Journal Lines as shown in the following table.
|
Line |
Account |
Debit |
Credit |
Description |
Notes |
|---|---|---|---|---|---|
|
1 |
3111-000-000- 52330-0000 |
10 |
|||
|
2 |
3121-000-0000- 52330-0000 |
20 |
|||
|
3 |
3199-000-0000- 52330-0000 |
14 |
|||
|
4 |
3899-000-0000- 52330-0000 |
16 |
|||
|
5 |
3899-000-0000- 13011-3121 |
16 |
Ledger Intercompany balancing line |
First, Line 4, the largest credit is balanced against line 2, the largest debit |
|
|
6 |
3121-000-0000- 21081-3899 |
16 |
Ledger Intercompany balancing line |
First, Line 4, the largest credit is balanced against line 2, the largest debit |
|
|
7 |
3199-000-0000- 13011-3121 |
4 |
Ledger Intercompany balancing line |
Remainder of line 2 is balanced against line 3, which is the next largest credit amount |
|
|
8 |
3121-000-0000- 21081-3199 |
4 |
Ledger Intercompany balancing line |
Remainder of line 2 is balanced against line 3, which is the next largest credit amount |
|
|
9 |
3199-000-0000- 13011-3111 |
10 |
Ledger Intercompany balancing line |
Finally, line 1 is balanced against the remainder of line 3. |
|
|
10 |
3111-000-0000- 21081-3199 |
10 |
Ledger Intercompany balancing line |
Finally, line 1 is balanced against the remainder of line 3. |
|
|
60 |
60 |