You create elimination subsidiaries the way you create other subsidiaries except that you check the Elimination box on the subsidiary record.
You can create an elimination subsidiary (as a child of the parent subsidiary) for any subsidiary that has child subsidiaries. Set the currency to the same currency as the base currency of the parent subsidiary.
You can use elimination subsidiaries to post journal entries that balance consolidated books. These journal entries, called elimination journal entries, reverse the impact of the intercompany transactions. Each elimination journal entry posts to an elimination subsidiary.
Only journal entries post to elimination subsidiaries. No other transactions post to elimination subsidiaries.
Note the following about elimination subsidiaries and transactions:
- An elimination subsidiary must use the same base currency and country combination as their direct parent subsidiary.
- With consolidated exchange rates, an elimination subsidiary must use a consolidated exchange rate of 1 to its direct parent subsidiary.
- You can select an elimination subsidiary only for journal entries, not for other transactions.
- A journal entry associated with an elimination subsidiary is a normal one, not an advanced intercompany one. It posts to a single elimination subsidiary.
- Elimination transactions post only to the elimination subsidiary and do not affect the general ledger.
- The system can automatically generate elimination journal entries if you enable the Automated Intercompany Management feature.
- 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.