We need to setup elimination subsidiaries in order to log journal entries to balance consolidated books
When subsidiaries transact, we may have to eliminate the revenue and expenses at the consolidated level to remove the effect of transactions between subsidiaries.
For example, intercompany transaction balances may require elimination for the following reasons:
- Sales between subsidiaries
- Inventory transfers between subsidiaries
- Loans between subsidiaries
To create Elimination Subsidiary:
1. Navigate to Setup > Company > Subsidiaries > New
2. Enter all required details including the below:
- Subsidiary of = This will become the parent company of the elimination subsidiary
- Elimination = True
3. Click Save
NetSuite recommends that there must be an Elimination Subsidiary per consolidation group, at least one directly under the group’s parent company.
Key Points about Elimination Subsidiaries
- NetSuite Does not auto-create elimination subsidiaries
- Must have the same base currency and country combination as their direct parent subsidiary.
- Usually have siblings(otherwise when the data is rolled up, there would be no data that needs elimination)
- Only journal entries post to elimination subsidiary(No transaction)
- Elimination transactions post only to the elimination subsidiary and do not affect the general ledger.
- You cannot select an elimination subsidiary on a bank account record or a credit card account record.
- You cannot select an elimination subsidiary on item records.
- The system can automatically generate elimination journal entries if you enable the Automated Intercompany Management feature
License fees for subsidiaries do not include charges for elimination subsidiaries, and elimination subsidiaries do not count toward the maximum of 250 subsidiaries.
