ADVANCED INTERCOMPANY JOURNAL TRANSACTIONS

An advanced intercompany journal entry is a specialized record type available only in OneWorld accounts. An advanced intercompany journal entry records debits and credits to be posted to ledger accounts for transactions between an originating subsidiary and multiple receiving subsidiaries.   

To create advanced intercompany journal entries, our role must include at least edit-level access for the Make Journal Entry permission. Advanced intercompany journal entries respect subsidiary and account restrictions. 

Journal lines that require elimination at period end are identified either by default. They are based on the intercompany account entered for the line, or by manually checking the line for elimination. 

At the end of the accounting period, complete the tasks in the Period Close Checklist. The last task on the checklist is Eliminate Intercompany Transactions. We can complete this task only after completing the Revalue Open Foreign Currency Balances and Calculate Consolidated Balances tasks. We must complete these two tasks first to ensure that foreign currency adjustment amounts have been calculated for transactions in the period. 

When we run intercompany elimination, NetSuite creates elimination journal entries for all intercompany transaction journal lines that have the Elimination box checked. Adjustments that result from the difference in the foreign currency exchange rates post to the Cumulative Translation Adjustment-Elimination (CTA-E) account. These differences occur from the originating intercompany journal entry and the elimination journal entry. NetSuite also creates a reversing journal entry for all intercompany journal lines that post to Intercompany Receivables and Intercompany Payables. 

Note: If a Journal entry with multiple currency lines use A/R or A/P account, ensure that an entity is selected in the Name column for the journal lines to be included in the currency revaluation process. This is a standard NetSuite behavior and revaluation of such journals without entity is currently an enhancement in the voting stage. 

To make an advanced intercompany journal entry: 

• Go to Transactions > Financial > Make Advanced Intercompany Journal Entries. 
  

• In the Classification section, select the Subsidiary initiating the journal entry. 

• We must select the Subsidiary before we can select the Currency. 
  On selecting the subsidiary, currency will be auto-populated. 
  

• The first line of this journal entry must post to the Subsidiary you select. 
  

Note: If the subsidiary we select is assigned to vendor or customer records, we can make journal entries for any of these vendors or customers. To do this, on the Lines subtab, select the vendor or customer from the Entity Name field.  

• In the Primary Information section: 

1. Review the Out of Balance By fields as we enter journal lines. They indicate whether the debits and credits in the journal entry balance. 

2. By default, the Currency field displays the base currency of the subsidiary selected in the Subsidiary field. We can change this value to any currency set up in our system. 

3. If one of the subsidiaries uses a base currency different from the selected currency, the Line subtab also displays the transaction amount translated into the subsidiary’s base currency. This translation is based on the exchange rate entered on the intercompany journal line. 

4. The Journal is only posted when it is approved. 

5. In the Date field, accept today’s date or enter a new date for the journal entry. The Posting period is filled on the basis of date selected. 
   

6. The posting period is determined when the journal entry is approved. When we approve a journal entry, we can select a different value than the one initially displayed. We cannot select a closed period. We may be able to select an open and locked period if our role includes the Override Period Restrictions permission. 

7. Leave the Reversal Date field blank and Defer Entry box blank, unless we want to create a reversing entry at the same time. 

8. If we check the Defer Entry box, the Reversal Date field is mandatory. 
   

9. In the Memo field, enter information to help us identify this journal entry in a list of other journal entries. The value in this field displays on the List page. 
   

• On the Lines subtab, enter the information for the journal lines. The columns that appear are based upon the permissions set for our user role. 

1. In the Subsidiary field, select the subsidiary to associate with this journal line. 

2. The first line must be the same as the subsidiary selected in the Subsidiary field in the Classification section of the journal entry. Lines after the first may be any of the other subsidiaries. 

3. The subsidiaries that appear in the list are based upon the permissions set for our user role. We must have access to all the subsidiaries on the record. 

4. In the Account field, select the general ledger account for posting this journal line. 

5. The list of available accounts is filtered according to any class, department, location, and subsidiary restrictions set for our role. Accounts that are associated with classes, departments, locations, or subsidiaries to which our role does not have access are not available in the Account list. 

6. If we use the Automated Intercompany Management feature, we can select an intercompany account. The Eliminate box is checked to flag the line for elimination at period end. 

7. In the Debit or Credit field as appropriate, enter the amount to post to the account. 

8. If required, select a Tax Code to determine the tax rate for the line. 

9. Optionally, enter a memo to help you recognize this entry in a register for this account. 

10. Optionally, in the Name field, select a customer, employee, project, or vendor to associate with this entry. 
    NetSuite filters the list of options in this field and includes only entities that support the selected base currency. If the subsidiary we selected is assigned to one or more shared vendor or customer records, we can make this journal entry for any of the vendors or customers to which the selected subsidiary is assigned. 
     
    If we use the Customers and Multiple Currencies feature, we can create a journal entry for an entity in any of that entity’s currencies. 

11. If we use Automated Intercompany Management, select an intercompany customer or intercompany vendor, as appropriate. 

12. This step only applies if we have enabled Departments, Classes, or both, and e classify at the line-level rather than the transaction-level. Select the appropriate classification to associate with this line-entry.  

13. If we have enabled Locations on the Company subtab of the Enable Features page, select the appropriate location to associate with this line. 

14. If we use the Amortization features: 

• In the Schedule column list, select the appropriate template. 
• Amortization templates display when the Amortization feature is enabled. 

15. If we are using the Automated Intercompany Management feature and the Eliminate box is checked, in the Due To/From Subsidiary column, select a subsidiary that is not the Subsidiary. 

16. The Due To/From Subsidiary defaults to the subsidiary that the intercompany entity in the Name field represents. We receive a warning if the Represents Subsidiary of an entity in the Name field does not match the Due To/From Subsidiary. The values must match if we want to run intercompany elimination for the line. 

17. If this line is the From Subsidiary, the selected subsidiary must be added as one of the To Subsidiaries in the transaction before saving. 
    If this line is the To Subsidiary, this column value must be the From Subsidiary. 

18. The Exchange Rate field is the current exchange rate between the selected currency and the base currency of the Subsidiary in the line. 
    We can edit the exchange rate on this line for only this transaction. To affect additional future transactions, we can also update the currency record with the entered exchange rate. 

19. If we have multiple rows on the Lines subtab that specify the same subsidiary, they must share the same Exchange Rate. If we have multiple subsidiaries with the same base currency, it is recommended that we keep their Exchange Rate values the same. 

20. Click Add. 

Tip:  When line details are similar, click Copy Previous and then make modifications as required. 

21. Repeat these steps for each line item. 

22. When we finish entering line items, the Debit and Credit out of balance fields at the top of the page should be blank. If either field contains an amount, our line items are out of balance and we cannot save this entry. The net debit and credit amount on the From subsidiary, must be the same as the total net credit and debit of all To subsidiaries combined. 

23. If we have the Automated Intercompany Management feature enabled, we can use the Auto Balance functionality. To automatically add elimination lines and balance the transaction, click Auto Balance. NetSuite automatically populates the balancing lines.  
    For example, if the net amount of a To subsidiary is a credit, NetSuite auto-populates an offsetting debit line with a Receivable type of account. 

Note: We cannot use a default intercompany journal entry Auto Balance account if that account has a currency or subsidiary restriction that makes the line invalid. For example, if the default Auto Balance account is restricted to the GBP currency, you cannot use it with a journal where the Base Currency (or Transaction Currency) is set to USD. 

24. To remove the automatic lines, click Undo Auto Balancing. 

Note: To use Auto Balancing, go to Accounting > Accounting Preferences > Items/Transactions, then set your preferences for Default ICJE Auto Balance Receivables Account and Default ICJE Auto Balance Payables Account.  

25. To post an intercompany journal entry, the total debits and credits must balance by subsidiary for every transaction. Debit and credit amounts between subsidiaries can be different. Upon saving the intercompany journal entry in this case, NetSuite alerts us that the journal entry does not balance between subsidiaries. To save the journal entry, click OK. 
26. This step only applies if we have enabled Departments, Classes, or both, and we classify at the transaction-level rather than the line-level. In the Classification section, select the appropriate classification to associate with this journal entry. 
    Note: If we add another line to the journal entry, then the classification we selected is cleared because the Department and Class drop-down lists are filtered based on the subsidiaries we select at the line-level. 
    
27. On the Communication subtab, we can attach files and notes to this transaction. 

• On the User Notes subtab, enter a title and note for any comments we want to add to this transaction. Click Add after each note 
• On the Files subtab, select and attach files from the File Cabinet related to this transaction. To upload a new file to the File Cabinet, select New from the list in the Attach Files column. 
• Use the Events, Tasks, and Phone Calls subtabs to add to attach activities, such as events, phone calls, and tasks to this transaction.  

28. Click Save. 

29. To view the general ledger impact of the created transaction, from the Actions list, select GL Impact. 

 Important:  

When you create an intercompany journal entry for subsidiaries with different base currencies, the general ledger impact reflects the balance in the base currency of the subsidiary. 

Note:  

When viewing transactions from advanced intercompany journal entries, the permissions set for our user role determine what we are able to view and edit. If we do not have access to all the subsidiaries on a record, we can only view data for the subsidiaries to which we have access. In addition, we cannot edit or copy the record.