Haus of Deal Logo
Module I· Consolidation & Equity MethodIntermediate
Question

How does elimination of intercompany transactions work?

Answer

Intercompany transactions are eliminated so the consolidated group reports only external transactions. Remove intercompany sales, balances, loans, dividends, and unrealized profit.

Deep diveShow more details

Carve-outs need special attention because historical intercompany charges may not equal market-rate standalone costs.

← PreviousWhat are non-controlling interests (NCI), and how are they treated?Next →How do you treat the purchase of additional shares, for example from 60% to 80%?
Back to Accounting