E1: 09: Overview of Intercompany Settlement Methods (P0000) (Doc ID 1416193.1)

Last updated on JANUARY 31, 2019

Applies to:

JD Edwards EnterpriseOne General Ledger - Version XE and later
JD Edwards EnterpriseOne Inventory Management - Version XE to XE [Release XE]
Information in this document applies to any platform.

Purpose

Overview

Intercompany settlements ensure that each company’s net balance equals zero i.e. debits equal credits. If your business enters transactions between companies, the companies will be out of balance unless you create and post intercompany balancing entries. You can either create these settlements yourself or choose a method of intercompany settlements to use and have the system create them automatically. You can select one of the following intercompany settlement methods to use:

Hub method
Detail method
Configured Hub method

NOTE: Configured Hub method was initally introduced in 8.9 release as part of enhancement <Bug 12477917> but was incorporated in other releases of EnterpriseOne later on.

When you post transactions using one of these methods, the system creates journal entries for intercompany settlements based on automatic accounting instructions (AAIs). The system tracks the transaction settlements through subledgers. Each company that is involved in an intercompany settlement has an automatic offset to the appropriate intercompany account with the subledger equal to the address book number of the offsetting company. The system uses the subledger field to record the other company that is involved in the transaction.

Example: A typical intercompany transaction between Companies 00001 (1.1110) and 91009 (91009.1105) will look like as follows:

Company	Account Number	Document Type	Subledger	Subledger Type	Amount
00001	1.1110	JE			-100.00
91009	91009.1105	JE			100.00
00001	1.1291	AE	00091009	A	100.00
91009	91009.1291	AE	00000001	A	-100.00

1.1291 and 91009.1291 are the intercompany accounts for 00001 and 91009 companies respectively.
The system generated intercompany transactions have

Document type as 'AE'.
Subledger Type as 'A' for Address Number.
Subledger Value as the address book number of the offsetting company.

NOTE: It is recommended to manually reconcile intercompany settlements on a periodic basis by running the following integrities:

Companies in Balance (R097001) <Document 664778.1>
Intercompany Accounts in Balance (R097011) <Document 1383141.1>

Scope

This document is intended for Finance Functional users who will be involved in setting up of General Accounting Constants in the General Accounting system.