Initial setting of intercompany transaction account in Netsuite system:
- Inter-company revenue, inter-company cost of goods sold, inter-company accounts receivable, inter-company accounts payable and other accounts have all been selected to offset inter-company transactions;
- The standard Cost of goods sold item does not check offset intercompany transactions.
- In the check list of the management accounting period, the offsetting intercompany transactions are performed during the period from January to December.
- In the check list for the management accounting Period, no offsetting intercompany transactions will be performed during the Adjustment Period.
- At present, only 2024December has not completed all of the inter-company transactions, and other external sales have been completed.
The test results in Netsuite system are as follows:
- Show offsetting intercompany receivables and offsetting intercompany payables in the offsetting subsidiaries of the consolidated balance sheet. Closing balance of the consolidated balance sheet: The closing balance after intercompany accounts receivable offset is 0, and the closing balance after intercompany accounts payable offset is 0.
- Show offsetting intercompany income, offsetting intercompany cost of goods sold, and offsetting standard cost of goods sold in the offsetting subsidiary in the consolidated income statement. Closing balance of the consolidated income statement: The closing balance after the offset of inter-company income is 0, and the closing balance after the offset of inter-company cost of goods sold is 0.
- Closing balance of consolidated balance sheet:The balance at the end of the account is not 0, and the balance is always added cumulatively.
- Balance of net profit and loss offset by subsidiaries in the consolidated income statement = offset by inter-company income offset by subsidiaries - offset by inter-company cost of goods sold offset by subsidiaries - offset by standard cost of goods sold offset by subsidiaries, The balance of the consolidated income statement against the net profit and loss of subsidiaries is equal to the Cumulative Translation adjust-elimination account ending balance.
- Balance of Retained earnings of subsidiaries offset by consolidated balance sheet + balance of net income = balance of net profit and loss of subsidiaries offset by consolidated income statement.
The questions to be answered are as follows:
- Does the Cumulative Translation Adjustment-Elimination account ending balance on the consolidated statement have to be 0 to be correct? If it is not 0, in what way is it adjusted to 0?
- Is the ending balance of the Cumulative Translation adjust-elimination account on the consolidated statement transferred from the net profit or loss generated by the offsetting of inter-company income, inter-company cost and standard cost of goods sold in the subsidiary?
- Is the standard consolidated report in Netsuite system accurate? Can I directly submit this consolidated statement to an accounting firm for audit, and can I use this consolidated statement as a business tax return?
