Intercompany Reconciliation
Intercompany reconciliation is the process of verifying and eliminating transactions between related entities within a corporate group. It ensures that intercompany receivables and payables net to zero in consolidated financial statements.
Key Details
- Intercompany transactions include management fees, shared services, inventory transfers, and intercompany loans
- Reconciliation identifies differences caused by timing, FX rates, cutoff issues, and recording errors
- Elimination entries remove intercompany balances and transactions from consolidated financials
- Complex multi-entity structures require systematic matching across currencies, systems, and accounting periods