Elimination process in AX 2009

Finance and Operations/AX User Forum
1

Hi All,

Can any one help me with elimination process while running consolidation between two companies.

Below is the scenario:

Consolidation company – CONS (currency - USD )
Subsidiary companies – Comp A (currency - CDF ) & Comp B (currency - USD)

There are some inter company transactions posted b/w Comp A & B, while running consolidation these entries needs to be eliminated.

I am confused with the std material which talks about Elimination rule, Source company & Destination company etc. Also in lines form under elimination rules form need to map ledger a/c’s in source column.

Now the question is:- If there are many ledger a/c’s then do I have to map each a/c with new line or how ?
And the elimination rules to be created in consolidation company or subsidiary company ?

When i created elimination rule in Consolidation company & mapped all those ledger a/cs which got posted with inter company entries and tried to run consolidation online process also by selecting elimination rule in elimination tab with proposal only option.
But system gives error as mentioned " The distributions do not balance" “The elimination rule … failed during processing”

Hence, please guide me with step by step configuration process for the same.

Please help…!!

Thanks to all in advance
Shrinivas

2

Shrinivas

reason y you geting this error is you would have defined only 1 line in the rule, elimination rules are like transaction you are creating in advance and running those transaction during consolidation, So enter the lines as if you are making the transaction in journal,

now setting of transaction also depend on 2 method one is net and 2nd is fixed. If you give Net then what ever amount is there in that account will be set off against the other account, in fixed you need to define the amount and AX will eliminate only that much amount.

Now coming to source and destination company, destination company will be always your consolidation company. i.e. you can run elimination rule only in consolidation company, however AX give option to define elimination rule in all the company.

rajesh kumar sharma

3

Hi Rajesh,
Thanks for u r reply.

Let me give u more precise description of my scenario to which u can be of good use & provide solution in detail.
Below is the scenario:

Consolidation company – CONS (currency – USD)
Subsidiary companies – Comp A (currency - CDF ) & Comp B (currency - USD)

Comp A has raised PO worth 100000 CDF to vendor XYZ and received material at his location.

Entries:
A/c Code Account name Amount Currency
100120 Inventory a/c Dr 100000 CDF
3001 Vendor XYZ Cr 100000 CDF

Comp B has paid amount in USD against XYZ vendor invoice on behalf of Comp A {Payment amount is 1000 USD – assuming Exch rate 100 CDF for 1 USD)

Entries: In Comp B
A/c Code Account name Amount Currency
100150 Inter-Comp Receivable a/c Dr 1000 USD
100200 Bank Cr 1000 USD

Entries: In Comp A
A/c Code Account name Amount Currency

3001 Vendor XYZ Dr 100000 CDF
200120 Inter-Comp Payable a/c Cr 100000 CDF

Now while running consolidation process I want to eliminate these entries in Consolidation Company.

Hence, I followed elimination process in Consolidation Company which is as below:

a. Selected elimination entries check box in GL – Parameters

b. Create elimination journal

c. Created elimination rule & selected elimination journal

d. In lines form – Elimination method is Net Change

Here is the Q’s: what are the ledger a/c’s should be considered / selected in Source account column so that these entries can be eliminated ??

Please help…!!

Thanks to all in advance
Shrinivas

4

Shrinivas,

Which version of AX are you working on? The answer would depend on that.

In general, you will have to mention a consolidation account in the chart of accounts for each of those accounts, run the consolidation process. Before doing that you will have to create those accounts in the consolidation company, setup the elimination rule in that consolidation company. Let me know the version. I will let you know the process.

Regards,

Vamsi Pranith

5

Hi Vamsi

Hope this text finds you well

Let me exaplain the steps I have done for consolidation

I have subsidiary and parent companies

I have created a new Consolidation company (CON)and enabled both consolidation and Elimination check box for this company

I created the elimination rule with CON as the Destination company and also created the Elimination journal in CON company

I do the consolidation process along with Elimination in the CON company by selecting the ELimination rule created in CON company

How will system identify the source company for elimination as I have not mentioned the same anywhere in my elimination rule

Ax allows users to create elimination rule in the Subsidiary company but how is the same linked to the Consolidation-Elimination company(CON)

Please advise I am using AX 2012

6

I reckon Elimination rule will work only if the transaction is posted via Inter company journal or Inter company orders

In the elimination rule you have to give the reaspecteive intercompany accounts and then run the elimination proposal manually or in the consolidation company during consolidation

7

Hi Shrinivas,

Pretty late response but, here is how AX works (irrespective of the version).

  1. If you are using 2009, and if your COA in subsidiary and the consolidation companies are different, then you will have to define the consolidation company account mapped to the subsidiary’s COA on the Default consolidation account on the account level.

  2. When you run the consolidation process all the balances based on the subsidiary COA mapping will be moved into Consolidation company’s mapped account.

  3. You do not have setup an elimination company to process the elimination rule separately. In your case you will have to eliminate your Inter Co AR with Interco AP, so those 2 accounts will be setup in the consolidation company as an elimination rule. While running the Consolidate [Online] process, there is a tab for elimination rule, so you will have to create record and select the elimination rule.

  4. After doing this, you will just have to execute the consolidation process and the system would propose the elimination entries in the Elimination journal.

Avoid using an elimination entity. That does not work, if the source and destination have different accounting currencies. AX consolidation is not as robust as what enterprise customers expect, but a very basic one if you are looking for a mid sized customer.

Hope this helps.

8

Hi Vamsi ,

I have few doubts after read the above post , hope you would clarify .

My question is without setup the elimination company ( Subsidiary company ) , how i can create the elimination rule seperately ?

So you mean that if the company has different accounting currencies , AX does not support the Consolidation . Am i right ?

9
  1. You do not have setup an elimination company to process the elimination rule separately.

My question is without setup the elimination company ( Subsidiary company ) , how i can create the elimination rule seperately ?

[Vamsi: Subsidiary is different from an Elimination entity. Elimination entity is only used for posting elimination transactions. Subsidiary is the entity that gets consolidated into a consolidation entity. BTW, there is no concept of subsidiary or holding entity in AX. If the holding entity has transactions in it, then it will have to be a separate entity altogether. All of them will have to be consolidated together and while doing that, you can setup the elimination rules in the consolidating entity itself to perform eliminations.]

void using an elimination entity. That does not work, if the source and destination have different accounting currencies. AX consolidation is not as robust as what enterprise customers expect, but a very basic one if you are looking for a mid sized customer.

So you mean that if the company has different accounting currencies , AX does not support the Consolidation . Am i right ?

[Vamsi: No. AX does support multi currency consolidations, even if the accounting currencies are different. But, if you are setting up an elimination rule in an entity, and if you wish that rule has to be executed in a different altogether, then the accounting currencies of both the entities will have to be same. They should not be different. Hope this clarifies.]

10

Hi Rajesh, I would like say thanks to you. I want to fallow ur descreptions. I am not able to get proparly what u r saying. Can you please Send me Setups documents. Mail: settipalli.satyam@gmail.com Regards Satya

11

Hi Rajesh,

What is Source & Target accounts. How can we take that accounts. Please help me.