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Auto Elimination

In some circumstances, each Daughter Company will be a separate cost centre that will be invoiced when it uses resources belonging to another Daughter Company. These internal costs and income usually should not be included in turnover figures in the consolidated accounts. They should be removed from the consolidated accounts so that the figures for the group as a whole are correct.

In some cases, you can eliminate internal costs and income simply by using the same Account as the Sales Account in one Daughter and as the Cost Account in the second Daughter, or by consolidating the two Daughter Accounts to the same Account in the Mother Company. Otherwise, you can eliminate the balances of Accounts used for this purpose using the Auto Elimination setting in the Nominal Ledger together with the 'Account Auto Elimination' Maintenance function, available in both the Nominal Ledger and the Consolidation module. You might use this method when internal transactions have been entered as sales in one Daughter and as purchases in another with slightly different values due to exchange rate differences, data entry errors, etc.

You can use the 'Account Auto Elimination' function in two ways