Netting Settlement

The netting statement automatically generates four netting settlements (two for each subsidiary). One netting settlement closes the accounts payable side of the general ledger. The other netting settlement closes the accounts receivable side of the general ledger. These netting settlements represent the general ledger impact of netting on each subsidiary.

If the netting exchange rate is different from the selected transactions exchange rate, NetSuite calculates realized gain and loss and rounding gain and loss. For more information, see Foreign Currency Revaluation.

Note:

NetSuite uses the system-generated IC Netting Clearing Account to book intercompany netting transactions. It is an other current asset type account, and is associated with all subsidiaries. NetSuite balances this account to zero after each netting. NetSuite also balances this account to zero at the consolidated subsidiary level.

For example, the Subsidiary A netting settlement for accounts payable books a $100 debit to the IC Accounts Payable account. It books a $100 credit to the IC Netting Clearing Account.

The Subsidiary A netting settlement for accounts receivable books a $100 credit to the IC Accounts Receivable account. It books a $100 debit to the IC Netting Clearing Account.

NetSuite uses those exact bookings for the two netting settlements for Subsidiary B.

The netting settlement provides the creation date, currency, posting period, and the due to or from subsidiary. It also provides the approval status, the netting statement from which it was created, and any memo.

The following subtabs provide additional information:

The Lines subtab provides the accounts to which the credits and debits were booked for the subsidiary and the associated entity. Intercompany Netting supports all classifications as well as custom segments. If the netted transactions specify a department, class, location, or custom segment, NetSuite groups the lines in the Netting Settlement based on these classifications. NetSuite also considers the general ledger account associated with the netted transactions in the grouping. If there are multiple transactions with the same classifications, including custom segments and general ledger accounts, NetSuite groups them into one line. If any classification in the netted transaction is different, NetSuite displays a separate line for that classification.

Note:
Intercompany Netting supports Multi-Book Accounting. If the netted transaction is in the subsidiary’s secondary accounting book, the Lines subtab displays two additional lines. Two lines for the primary accounting book, and two lines for the secondary accounting book. The secondary accounting book inherits the exchange rate type of the primary accounting book.

To see the exchange rate used for transactions impacting the secondary accounting book, use a Transaction search. For more information, see Accounting Transaction Search.
The Applied To subtab provides a link to the related transaction and the amount applied to that transaction.
The System Notes subtab lists the details associate with the netting settlement created from the netting statement.
The GL Impact subtab provides details specific to the debit and credit applied to the subsidiary’s intercompany accounts. Click the account link to see the transaction register for that account.

Note:

If you use the Allow Per-Line Classification for Netting Settlement intercompany preference, NetSuite classifies all netting settlements based on the netted transactions. For information about intercompany preferences, see Defining Intercompany Preferences.

The Lines and GL Impact subtabs provide additional information if you use this intercompany preference. On these two subtabs, there are columns for Location, Department, Class and any custom segment such as Business Unit. If there are multiple transactions with the same classifications including custom segments and general ledger accounts, NetSuite groups them into one line. If any classification in the netted transaction is different, NetSuite displays a separate line.

After you approve the Netting Statement, you can view the classifications on customized Transaction Detail and General Ledger reports. Customized these two reports to include Location, Department, Class, and any custom segment. For information about these reports, see Transaction Detail Report and General Ledger Report.

Tip:

You cannot edit netting settlements. However, you can delete them by deleting the associated netting statement.

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