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Consolidation entry compounding monthly

edited Feb 6, 2019 9:52PM in General Ledger & Intercompany 4 comments

Summary

Why is our consolidation entry compounding monthly?

Content

We have only used intercompany/consolidation for about 4 months. 

The Balance Sheet looks great.

The P&L does not.

A consolidating entry is posting to the consolidating/clearing BU as:

DR Revenue

CR COGS

This entry is correct, to eliminate the Management Fee billed by one BU to a second BU.

What is not correct is that each month this entry compounds the amount.  For example, say the monthly Management Fee is $1,000, this is what the consolidation entry is looking like:

September - DR  Revenue  $1,000

                   CR  COGS     $1,000

October -     DR Revenue   $2,000

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