Examples of Calculation for Gross and Net Accounting:

In the following examples, company A is owned by 55% and company B is owned by 50% and both companies are consolidated with the proportional method. A has reported a receivable from B of 200 and B has reported a payable to A of 200.

Gross Accounting:

When there is an intercompany balance between two companies that are consolidated with the proportional method, the calculation for the amount booked on the external account is: (IC amount * owned percent) * (100 - owned percent of counter company) for Gross Accounting:

Company A: (200 * 55%) * (100% - 50%) = 55 on the external account.

Company B: (200 * 50%) * (100% - 55%) = 45 on the external account

Net Accounting:

When there is an intercompany balance between two companies that are consolidated with the proportional method, the company with the highest owned percent will take the external part. The calculation for the amount booked on the external account is: IC amount * (owned percent - owned percent counterpart)

Company A: 200 * (55% - 50%) = 10 on external account Company B: No amount booked on external account