Question 1

What gets eliminated in consolidation?

Accepted Answer

Anything that happened only between entities in the same group. That includes intercompany loans and the receivable and payable balances they create, management fees, sales between entities, and dividends paid from one group member to another. The group cannot owe, sell to, or earn from itself, so these items are removed from the consolidated statements. Each entity's own books are not changed.

Question 2

Why do both sides have to agree before eliminating?

Accepted Answer

An elimination entry removes the same amount from both entities at the consolidated level. If the lender shows a $25,000 receivable but the borrower shows a $24,000 payable, eliminating $25,000 leaves a $1,000 difference sitting in the consolidated balance sheet. Find and correct the break in the entity books first, then eliminate the agreed amount.

Question 3

What does this worksheet not cover?

Accepted Answer

It handles the common one-for-one eliminations: loans and balances due, management fees, intercompany sales, and dividends. It does not calculate unrealized profit left in inventory, eliminate the parent's investment in a subsidiary against the subsidiary's equity, or apply ownership percentages for non-controlling interest. Those need a full consolidation workpaper.

Question 4

Is the worksheet free?

Accepted Answer

Yes. No signup, email, or account required, and nothing you enter leaves your browser unless you copy a share link. EmLedger itself starts with a free 14-day trial.

Item	Account	Entity	Debit	Credit
1	Dr Intercompany payable	OpCo A	$25,000
	Cr Intercompany receivable	Holdings		$25,000
2	Dr Management fee revenue	OpCo A	$4,000
	Cr Management fee expense	OpCo B		$4,000

Intercompany elimination worksheet. Entries in seconds.

Intercompany items

Elimination entries, consolidated level only

Removed from the consolidated statements

Keep reading

Ready to simplify your multi-entity accounting?