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Intercompany Eliminations

HFM uses the Account, ICP, and Value dimensions to process Intercompany (ICP) matching and eliminations. This functionality matches values between ICP accounts that share a common suspense account (plug account), automatically creates eliminations at the proper entity levels for each intercompany account, and writes unresolved differences into the specified suspense account (plug account). The first concern people have is that HFM is somehow plugging the data in the consolidation. It actually isn’t working quite that way.

In Figure 2-8 we show how this elimination works. For each intercompany transaction that is eliminating, HFM will create both sides of the entry that offsets the data value from the intercompany account, and intercompany partner. That offsetting amount, though, is written to the plug account. If the entries do in fact match, then the debit and credit for each side of the intercompany match would net to zero. For example, if you had one entity with an intercompany payable and one with an intercompany receivable, when each entity reaches the common parent, when the elimination should take place, there is an entry in the Value dimension for that account that offsets the amount in the account eliminating. At the same time, HFM also writes a value for each offset it created to the suspense account or plug account.


  

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