Define Control Tables - Intercompany Balances - the Standard Tab

Use this function to define control tables that are used for reconciliation reports and posting of automatic eliminations. In the control tables you determine the accounts to use, how they are reconciled, and how the automatic elimination is to be performed. Each control table receives a journal number. This journal number is also the report number for the reconciliation report. You can select to create a reconciliation report only and book the elimination manually.

Table 1. Example of defining control tables for intercompany balances
Account 1 Sign Account 2 Comment
1000 EUR - -1000 EUR The amount will be eliminated.
1000 EUR + +1000 EUR You normally use + to post the external part of the elimination (proportional method).
  • For companies with consolidation method S, you must use Rule S or R in the control table.
  • For eliminations between a company using the S method and a company using the P method, Rule S and R will display the same result. For eliminations between two companies that both use the S method, Rule R will display external bookings for both companies, while the S method will display external bookings for one company only.
  • In order to be able to use the routine for reconciliation of intercompany balances, each company must report intercompany balances on special accounts, which are defined as account type I, J or M in the account structure. Limitation: In the intercompany balance control table, a combination of accounts with intercompany codes I and J in the same control table will give incorrect result.
  • The Automatic Journal for Intercompany Balances must be activated in Maintain/Configuration/Automatic Journals/Define.
  • You decide per consolidation type if the intercompany balances should be stored as group journals or company journals. Maintain/Company Structure/Consolidation Types - Define.
  • If dimensions and linked structures are used, IBM® Cognos Controller validates that the dimension is valid for the company according to the linked structures. If it is not valid, the transactions will be posted on the first valid dimension for the company.

Procedure

  1. On the Maintain menu, click Configuration > Automatic Journals > Control Tables > Intercompany Balances.
    The Control Tables - Intercompany Balances window opens.
  2. Select a journal number. The journal number is also the report number when running the reconciliation. The number series begins with 1 and continues in order to 99.
  3. Select Active to indicate that the control tables should be used to create an automatic journal for elimination of intercompany balances or Non-active to indicate that the control table should only be used to generate a reconciliation report, from which you can create company/group journals for elimination manually.
  4. Enter a description of the control table in the local and group language.
  5. Define an Offset Account. When the elimination is posted as a company journal on a company, the offset account is used to balance the journal. You can also define extended dimensions 1-4. This account can be an account of account type A, L, E, I, C, R, S, T or U, but it cannot be defined as an intercompany account.
  6. The I/ C Elimination section has a receivable/income table and a payable/cost table. In the Account 1 column of the Receivable/Income table, define the account or accounts you want to reconcile with the accounts you have defined for payable/cost. Only accounts coded as intercompany accounts (account type I,J or M in the account structure) will be available in the pop-up list.

    If the intercompany balances are divided into dimensions, it is important to consider on which dimension level you enter data.

    The accounts entered in the Account 1 column for receivable/income and payable/expenses are used for reconciliation against each other. They should therefore be at the same dimension level.

  7. In the Payable/Expenses, define the account or accounts you want to reconcile with the accounts you have defined for receivable/income. Only accounts coded as intercompany accounts (account type I,J or M in the account structure) will be available in the pop-up list.

    If the intercompany balances are divided into dimensions, it is important to consider on which dimension level you enter data.

    The accounts entered in the Account 1 column for receivable/income and payable/expenses are used for reconciliation against each other. They should therefore be at the same dimension level.

  8. In the Sign +/- columns, define if you want to post an elimination - (minus) or an external part of a transaction with a proportional company + (plus). If you post the external part of the transaction, you should use the Rule column and define in which way it should be posted.
  9. In the CC ind columns, indicate if the elimination should be booked on the counter company, instead of the original company. This option is only relevant when posting the elimination as company journal.
  10. In the Rule columns, select how to book the external part of the amount:
    • Blank - the elimination is performed according to the consolidation method defined in the company structure. If there is an external part of the intercompany balance, it will remain on the intercompany account.
    • R - The external part of the intercompany balance will be booked on the defined account. This concerns companies consolidated with the proportional method (S). If there is an intercompany transaction between two companies consolidated with proportional methods, the calculation will be performed according to gross accounting. That is, both companies will carry an external part. For more information, see The Proportional Method.
    • S - The external part of the intercompany balance will be booked on the defined account, according to net accounting. That is, the company with the highest owned percentage will take the external part. For more information, see The Proportional Method. This concerns the proportional method (S).
    • E - All intercompany balances will be eliminated on every subgroup. Intercompany balances outside the own group will be booked to the defined external account. This concerns all consolidation methods, including the purchase method. If there is an intercompany transaction between two companies consolidated with proportional methods, the calculation will be performed according to gross accounting (see rule R).
    • F - All intercompany balances will be eliminated on every subgroup. Intercompany balances outside own group will be booked to defined external account. This concerns all consolidation methods, also the purchase method. If there is an intercompany transaction between two companies consolidated with proportional methods, the calculation will be performed according to net accounting (see rule S).
    • 1 - The intercompany balance will be eliminated by 100%, also for the proportional method (S). Use this method for companies that report their own part only. For more information, see The Proportional Method.
  11. In the Account 2 columns, define the account(s) where the elimination should be posted. You can post the elimination on several accounts by adding more elimination rows to the table.

    If you use dimensions, you must make sure that the accounts entered in column Account 2, should be on the same dimension level as Account 1 or on a higher level. They cannot be on a lower level.

  12. If you store the automatic journals on the companies, you have to define on which company the difference should be posted in the I/C Difference Posting section. If you store the elimination as group journals on the adjustment company, the differences will be stored on the adjustment company as well.

    Select Difference on Receivables/Income to book differences regarding intercompany balances on the company which has reported the receivable/income amount.

    Select Differences on Payables/Expenses to book differences regarding intercompany balances on the company, which has reported the payable/cost amount.

  13. Enter the accounts to which you want to book differences. If you use dimensions on the account you can also specify the dimension to book the difference to.
    Note: The Chg Type (see below) determines which types of accounts you can use to post differences to.
  14. Select the Diff Type that should be booked on the specific account. You can select to post all differences to the same account or to post a positive real difference to one account and a negative real difference to another account. You have the same option for the translation difference. If the companies have used different currency rates or entered different local amounts, a translation difference, positive or negative, occurs after the currency translation. A prerequisite for using transaction currency is that you have to define the account with intercompany code J in the account structure.
    • + = Positive difference
    • - = Negative difference
    • P = Positive translation difference
    • N = Negative translation difference
  15. In the Chg Type column, select one of Y Closing Balance (year to date) or C This Years Difference.
    Y Closing Balance (year to date): The difference will be posted as the difference for this year. The total difference, Closing Balance, is booked on the account defined for differences. For example,
    Year Rec - Pay Difference
    1 125$ - 120$ 5$
    2 122$ - 128$ -6$
    3 120$ - 120$ 0$
    C This Years Difference: The difference that occurs between Receivables/Payable or Income/Costs will be calculated only for this year. This Year's Difference is booked on the account defined for differences. If you use code C (This Year's Difference), you must have a movement account structure with an Opening Balance account, movement account(s), and a Closing balance account. This Year's Difference is calculated as Closing balance (Y) – Opening Balance (From account structure) = This Year's Difference (C). For using change code C, the correct account structure must exist, meaning OB + Change account = CB. For example,
    Year Rec - Pay Result
    1 125$ - 120$ This year's difference: 5$

    Closing balance: 5$
    2 122$ - 128$ Opening balance: 5$

    This year's difference: -11$

    O Opening Balance: Change type O is not used in the calculation. To avoid configuration errors, the account used for the opening balance is in the account structure and general configuration. The change code O can be selected, which avoids the problem of saving changes in control tables due to earlier configurations. You can add the Opening balance account connected to This Year's Difference in the Control Table with change type O to make it visible. However, Cognos Controller still traces the account from the account structure.

    The following examples show how differences in IC control tables can be set up.
    Receivables – Payables
    Difference in Balance Sheet - change code Y
    Receivables – Payables
    Difference in Balance Sheet - change code Y for real differences
    Difference in account This year currency conversion diff in Retained Earnings - Code C for currency conversion differences
    Receivables – Payables
    Difference Profit & Loss Statement - change code C
    Incomes - Costs
    Difference Profit & Loss Statement - change code C
  16. You can add dimensions to which any differences will be booked.

    If the accounts you want to eliminate are divided into dimensions, you have the possibility to post the difference on a specific dimension. You define this by entering the dimension code in the dimension 1-4 columns. If no dimension code is defined, the difference is booked on the dimensions used for the elimination or if the dimension is not valid, on the first available valid dimension.

    The accounts for difference booking should also be on the same dimension level as Account 2 or on a higher level. They cannot be on a lower level.

  17. Click the save icon.