Intercompany
Complete guide to intercompany close procedures including adjustments and eliminations for NetSuite OneWorld.
Overview
INTERCOMPANY CLOSE PROCESS
═══════════════════════════════════════════════════════════════════
DURING PERIOD PERIOD-END
────────────── ──────────
IC Transactions IC Adjustments IC Eliminations
(Auto-generated) (Balance out) (Consolidation)
│ │ │
▼ ▼ ▼
┌──────────────┐ ┌──────────────┐ ┌──────────────┐
│ IC Sales │ │ Adjust any │ │ Remove IC │
│ IC Purchases │───────────►│ out-of- │──────►│ revenue, │
│ IC JE │ │ balance │ │ expense, │
│ IC Transfers │ │ positions │ │ receivables, │
└──────────────┘ └──────────────┘ │ payables │
└──────────────┘
│
▼
Consolidated
Financials
Intercompany Transaction Types
Common IC Transactions
| Transaction Type | Description | Auto-Generates |
|---|---|---|
| IC Sales Order | Sale between subsidiaries | IC Purchase Order |
| IC Invoice | Revenue recognition | IC Vendor Bill |
| IC Journal Entry | Manual IC posting | Offsetting JE |
| IC Transfer | Inventory movement | Receiving entry |
| IC Charge | Allocation/management fee | IC Bill |
IC Transaction Flow
INTERCOMPANY INVOICE FLOW
───────────────────────────────────────────────────────────
SUB A (Selling) SUB B (Buying)
─────────────── ───────────────
IC Invoice ──────────────────────► IC Vendor Bill
│ │
▼ ▼
Dr: IC Receivable $10,000 Dr: Expense $10,000
Cr: IC Revenue $10,000 Cr: IC Payable $10,000
At Consolidation:
Eliminate:
IC Revenue $10,000 eliminate
IC Expense $10,000 eliminate
IC Receivable $10,000 eliminate
IC Payable $10,000 eliminate
IC Balance Review
Reviewing IC Balances
INTERCOMPANY BALANCE REPORT
───────────────────────────────────────────────────────────
Navigation: Reports > Financial > Intercompany Balances
Period: January 2026
FROM SUB TO SUB RECEIVABLE PAYABLE DIFFERENCE
──────── ────── ────────── ─────── ──────────
US Corp UK Ltd $50,000 $50,000 $0 ✓
US Corp Germany GmbH $25,000 $25,000 $0 ✓
UK Ltd Germany GmbH €15,000 €14,800 €200 ✗
⚠️ UK Ltd / Germany GmbH has €200 imbalance - needs adjustment
Common Imbalance Causes
| Cause | Description | Resolution |
|---|---|---|
| Timing differences | One side posted, other pending | Post pending transaction |
| Currency mismatch | Rate difference at booking | Adjust with IC JE |
| Manual error | Wrong amount entered | Correct transaction |
| Missing transaction | Auto-generate failed | Create manually |
Create Intercompany Adjustments
Adjustment Process
CREATE IC ADJUSTMENTS
───────────────────────────────────────────────────────────
Navigation: Period Close Checklist > Create Intercompany Adjustments
Prerequisites:
✓ Lock A/R complete
✓ Lock A/P complete
✓ Lock All complete
Process:
1. System identifies IC imbalances
2. Review proposed adjustments:
┌────────────────────────────────────────────────────┐
│ IC Adjustment Preview │
│ │
│ UK Ltd ←→ Germany GmbH │
│ Imbalance: €200 │
│ │
│ Proposed Entry: │
│ UK Ltd: Dr IC Expense €200 │
│ Germany: Cr IC Payable €200 │
└────────────────────────────────────────────────────┘
3. Approve or modify adjustments
4. Click "Create Adjustments"
5. System generates IC Journal Entries
Manual IC Adjustment
MANUAL IC JOURNAL ENTRY
───────────────────────────────────────────────────────────
Navigation: Transactions > Financial > Make Intercompany JE
Entry:
┌────────────────────────────────────────────────────────┐
│ Subsidiary: US Corp │
│ │
│ Line 1 (US Corp): │
│ Account: IC Receivable - UK │
│ Debit: $500 │
│ │
│ Line 2 (UK Ltd): │
│ Account: IC Payable - US │
│ Credit: $500 │
└────────────────────────────────────────────────────────┘
Use for:
- Timing adjustments
- Error corrections
- FX true-ups
- Miscellaneous charges
Eliminate Intercompany Transactions
Elimination Process
IC ELIMINATION PROCESS
───────────────────────────────────────────────────────────
Navigation: Period Close Checklist > Eliminate Intercompany Transactions
Prerequisites:
✓ Create IC Adjustments complete
✓ Calculate Consolidated Rates complete (if multi-currency)
Elimination Types:
1. REVENUE/EXPENSE ELIMINATION
Remove IC sales/COGS from consolidated P&L
2. BALANCE SHEET ELIMINATION
Remove IC receivables/payables from consolidated BS
3. EQUITY ELIMINATION
Eliminate investment in subsidiary
Elimination Rules
ELIMINATION RULES CONFIGURATION
───────────────────────────────────────────────────────────
Navigation: Setup > Accounting > Intercompany Elimination Rules
Rule Setup:
┌────────────────────────────────────────────────────────┐
│ Rule Name: Revenue/COGS Elimination │
│ Type: Revenue and Expense │
│ │
│ Accounts to Eliminate: │
│ 4000 - IC Revenue │
│ 5000 - IC Cost of Sales │
│ │
│ Elimination Account: │
│ 9100 - IC Elimination │
│ │
│ ☑ Auto-generate eliminations │
└────────────────────────────────────────────────────────┘
Elimination Journal Entry
IC ELIMINATION JOURNAL ENTRY
───────────────────────────────────────────────────────────
IC Revenue/COGS Elimination:
Original IC Transactions:
US Corp: IC Revenue $100,000 Cr
UK Ltd: IC COGS $100,000 Dr
Elimination Entry (at Parent):
IC Revenue $100,000 Dr ← Removes revenue
IC COGS $100,000 Cr ← Removes expense
Result: Net zero impact on consolidated P&L
─────────────────────────────────────────────────────────────
IC Balance Sheet Elimination:
Original Balances:
US Corp: IC Receivable $50,000 Dr
UK Ltd: IC Payable $50,000 Cr
Elimination Entry (at Parent):
IC Payable $50,000 Dr ← Removes liability
IC Receivable $50,000 Cr ← Removes asset
Result: IC balances eliminated from consolidated BS
IC Close Sequence
Recommended Order
IC CLOSE SEQUENCE (OneWorld)
═══════════════════════════════════════════════════════════════════
STEP 1: Close Child Subsidiaries First
└── Complete all close tasks for each child
STEP 2: Review IC Balances
└── Generate IC Balance Report
└── Identify and resolve imbalances
STEP 3: Create IC Adjustments
└── Balance out timing differences
└── FX adjustments between subs
STEP 4: FX Revaluation
└── Revalue IC receivables/payables
└── Post unrealized FX gains/losses
STEP 5: Calculate Consolidated Rates
└── Period-end and average rates
└── Applied to all sub financials
STEP 6: Eliminate IC Transactions
└── Revenue/expense elimination
└── Balance sheet elimination
STEP 7: Close Parent Subsidiary
└── Final close tasks
└── Period closed for all
IC Reporting
Intercompany Balance Report
INTERCOMPANY BALANCES
───────────────────────────────────────────────────────────
As of: January 31, 2026
DUE FROM/TO MATRIX (in USD):
US Corp UK Ltd Germany Japan TOTAL
─────── ────── ─────── ───── ─────
US Corp - $50,000 $25,000 $10,000 $85,000
UK Ltd ($50,000) - $15,000 $5,000 ($30,000)
Germany ($25,000) ($15,000) - $8,000 ($32,000)
Japan ($10,000) ($5,000) ($8,000) - ($23,000)
─────── ────── ─────── ───── ─────
TOTAL $0 $0 $0 $0 $0
✓ All IC balances net to zero
IC Elimination Report
IC ELIMINATION SUMMARY
───────────────────────────────────────────────────────────
Period: January 2026
Elimination Type Amount
─────────────────── ──────
IC Revenue Eliminated $500,000
IC COGS Eliminated ($500,000)
IC Receivables Eliminated $150,000
IC Payables Eliminated ($150,000)
────────────────────────────────────────
Net P&L Impact $0
Net BS Impact $0
Best Practices
IC Management
| Practice | Recommendation |
|---|---|
| Timing | Process IC transactions promptly |
| Matching | Ensure both sides post same period |
| Currency | Use consistent rates |
| Review | Weekly IC balance review |
| Documentation | Document adjustment reasons |
Common Issues
| Issue | Cause | Resolution |
|---|---|---|
| IC imbalance | Timing difference | Wait for other side to post |
| Large FX variance | Rate changes | Use consistent rate source |
| Missing elimination | New account not in rules | Update elimination rules |
| Partial elimination | Amount mismatch | Reconcile and adjust |
Related Topics
- Consolidation - Multi-sub consolidation
- Foreign Currency - Multi-currency IC
- Period Close Checklist - All close tasks