When trying to create an advanced intercompany journal entry, may encounter an error message like “’The Subsidiary in the first line is restricted to From Subsidiary’”. Using an advanced intercompany journal entry, you can specify the originating subsidiary and multiple receiving subsidiaries for the journal entry. That is, we can include multiple To Subsidiaries.
Then Intercompany Journal Entries involve two subsidiaries namely (1) From Subsidiary and (2) To Subsidiary. It is a requirement that the first journal line should be a transaction for the ‘From Subsidiary’. If the first journal line is coming from the ‘To Subsidiary’ instead, the user will encounter a system error message.
To rectify this, make the first line of the journal entry “From subsidiary”.