Elimination Accounts
During the consolidation process, Deltek eliminates (excludes from the merged data) any account balances or portions of account balances that represent intercompany transactions between the companies in the consolidation group.
Because Deltek eliminates intercompany transactions, the consolidated information gives an accurate view of the financial state of the consolidation group as a whole.
Deltek automatically eliminates all or portions of the balances of the following accounts used in intercompany transactions:
- Intercompany accounts receivable account
- Intercompany accounts payable account
- Intercompany suspense account
- Regular, overhead, and promotional labor accounts for intercompany billing
- Regular, overhead, and promotional expense accounts for intercompany billing
- Balance sheet and other accounts for intercompany billing
- Tax accounts for intercompany billing
In addition, when you set up a consolidation group, you can use the Eliminations tab of the Consolidated Reporting Setup form to specify any other accounts that you want Deltek to eliminate when it processes a consolidation for that group. For example, you can eliminate accounts for loans between companies in the group and equity accounts representing subsidiary holdings.
After you process a consolidation, you can generate the Consolidated Eliminations report to review the accounts and amounts that were eliminated.
Setting Up User-Defined Elimination Accounts
During the consolidation process, Deltek eliminates the entire account balance for the user-defined elimination accounts that you specify on the Eliminations tab. Because of this, if an account specified as an elimination account for one consolidation group is also used for intercompany transactions involving a company that is not part of that group, the consolidated data will not include those transactions. To avoid this, make sure that the accounts you identify as user-defined elimination accounts for a consolidation group are only used for transactions involving companies that belong to that group.
Deltek recommends that you do not list on the Eliminations tab any of the accounts that Deltek eliminates automatically from consolidations. Deltek bases its eliminations on individual transactions so that it only eliminates activity between the companies included in the consolidation. If you instead specify one of these accounts on the Eliminations tab for a consolidation group, the entire account balance will be eliminated, even if a portion of that balance represents transactions for companies outside of the consolidation group.
Example
Company A makes loans to both Company B and Company C. If you do consolidated reporting for a consolidation group that includes Companies A and B but not Company C, you want to eliminate the effect of transactions related to the A-to-B loan from the consolidation results, but you do not want to eliminate those related to the A-to-C loan.
If you use the same general ledger accounts for both loans and select them as elimination accounts for the consolidation group, Deltek eliminates the complete account balances. As a result, the transactions for both loans are excluded from the consolidated information.
To get the result you want, you must set up and use separate sets of general ledger accounts for each of the loans, so that the accounts used for the A-to-B loan can be eliminated without eliminating those for the A-to-C loan.