![]() ![]() In this way, the financial situation can be presented accurately, which leads to more transparency. Benefits of accounting of intercompany transactionsĬonsolidation is easier for the group if it records intercompany transactions separately. In this case, the accounting staff must be familiar with the respective tax regulations in the respective countries so that they can correctly evaluate the intercompany transactions and prepare an error-free tax balance sheet. The handling of intercompany transactions becomes more complex when a group has subsidiaries in different countries where different tax laws apply. In any case, intercompany transactions must be recorded as such and their impact on the tax burden of the group must be verified. The recording of intercompany transactions does not only concern international groups, but can also affect companies that have several subsidiaries in the same country. ![]() This has an impact on the balance sheet as well as on the tax return, which is why these transactions must be recorded separately. It is a lateral transaction.Īll these transactions have an impact on the financial situation of the companies involved, but there is no profit or loss for the group. When company A purchases certain goods from company B, there is a flow of money from A to B. Two of the subsidiaries regularly purchase goods from each other. ![]() The Group grants loans to its subsidiaries at more favourable conditions than a bank, so that the companies receive liquid funds for the expansion of their operations more quickly and without bureaucracy. The subsidiaries pay annual management fees to the group, which corresponds to an upstream transaction.
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