Intercompany Processing

Generate matched intercompany transactions and elimination entries.

Overview

Intercompany features simulate multi-entity corporate structures:

IC transaction pairs (seller/buyer)
Transfer pricing
IC reconciliation
Consolidation eliminations

Prerequisites

Multiple companies must be defined:

companies:
  - code: "1000"
    name: "Parent Company"
    is_parent: true
    volume_weight: 0.5

  - code: "2000"
    name: "Subsidiary"
    parent_code: "1000"
    volume_weight: 0.5

Configuration

intercompany:
  enabled: true

  transaction_types:
    goods_sale: 0.4
    service_provided: 0.2
    loan: 0.15
    dividend: 0.1
    management_fee: 0.1
    royalty: 0.05

  transfer_pricing:
    method: cost_plus
    markup_range:
      min: 0.03
      max: 0.10

  elimination:
    enabled: true
    timing: quarterly

IC Transaction Types

Goods Sale

Internal sale of inventory between entities.

Seller (1000):
    Dr Intercompany Receivable   1,100
        Cr IC Revenue            1,100
    Dr IC COGS                     800
        Cr Inventory               800

Buyer (2000):
    Dr Inventory                 1,100
        Cr Intercompany Payable  1,100

Service Provided

Internal services (IT, HR, legal).

Provider (1000):
    Dr IC Receivable               500
        Cr IC Service Revenue      500

Receiver (2000):
    Dr Service Expense             500
        Cr IC Payable              500

Loan

Intercompany financing.

Lender (1000):
    Dr IC Loan Receivable       10,000
        Cr Cash                 10,000

Borrower (2000):
    Dr Cash                     10,000
        Cr IC Loan Payable      10,000

Dividend

Upstream dividend payment.

Subsidiary (2000):
    Dr Retained Earnings         5,000
        Cr Cash                  5,000

Parent (1000):
    Dr Cash                      5,000
        Cr Dividend Income       5,000

Management Fee

Corporate overhead allocation.

Parent (1000):
    Dr IC Receivable             1,000
        Cr Mgmt Fee Revenue      1,000

Subsidiary (2000):
    Dr Mgmt Fee Expense          1,000
        Cr IC Payable            1,000

Royalty

IP licensing fees.

Licensor (1000):
    Dr IC Receivable               750
        Cr Royalty Revenue         750

Licensee (2000):
    Dr Royalty Expense             750
        Cr IC Payable              750

Transfer Pricing

Methods

Method	Description
`cost_plus`	Cost + markup percentage
`resale_minus`	Resale price - margin
`comparable_uncontrolled`	Market price

transfer_pricing:
  method: cost_plus
  markup_range:
    min: 0.03                        # 3% minimum markup
    max: 0.10                        # 10% maximum markup

  # OR for resale minus
  method: resale_minus
  margin_range:
    min: 0.15
    max: 0.25

Arm’s Length Pricing

Prices generated to be defensible:

#![allow(unused)]
fn main() {
fn calculate_transfer_price(cost: Decimal, method: &TransferPricingMethod) -> Decimal {
    match method {
        TransferPricingMethod::CostPlus { markup } => {
            cost * (Decimal::ONE + markup)
        }
        TransferPricingMethod::ResaleMinus { margin, resale_price } => {
            resale_price * (Decimal::ONE - margin)
        }
        TransferPricingMethod::Comparable { market_price } => {
            market_price
        }
    }
}
}

IC Matching

Matched Pair Structure

#![allow(unused)]
fn main() {
pub struct ICMatchedPair {
    pub pair_id: String,
    pub seller_company: String,
    pub buyer_company: String,
    pub seller_entry_id: Uuid,
    pub buyer_entry_id: Uuid,
    pub transaction_type: ICTransactionType,
    pub amount: Decimal,
    pub currency: String,
    pub transaction_date: NaiveDate,
}
}

Match Validation

intercompany:
  matching:
    enabled: true
    tolerance: 0.01                  # 1% variance allowed
    mismatch_rate: 0.02              # 2% intentional mismatches

Match statuses:

matched: Amounts reconcile
timing_difference: Different posting dates
fx_difference: Currency conversion variance
unmatched: No matching entry

Eliminations

Timing

intercompany:
  elimination:
    timing: quarterly                # monthly, quarterly, annual

Elimination Types

Revenue/Expense Elimination:

Elimination entry:
    Dr IC Revenue (1000)           1,100
        Cr IC Expense (2000)       1,100

Unrealized Profit Elimination:

If buyer still holds inventory:
    Dr IC Revenue                    300
        Cr Inventory                 300

Receivable/Payable Elimination:

    Dr IC Payable (2000)          10,000
        Cr IC Receivable (1000)   10,000

Output Files

ic_pairs.csv

Field	Description
`pair_id`	Unique pair identifier
`seller_company`	Selling entity
`buyer_company`	Buying entity
`seller_entry_id`	Seller’s JE document ID
`buyer_entry_id`	Buyer’s JE document ID
`transaction_type`	Type of IC transaction
`amount`	Transaction amount
`match_status`	Match result

eliminations.csv

Field	Description
`elimination_id`	Unique ID
`ic_pair_id`	Reference to IC pair
`elimination_type`	Revenue, profit, balance
`debit_company`	Company debited
`credit_company`	Company credited
`amount`	Elimination amount
`period`	Fiscal period

Example Configuration

Multi-National Structure

companies:
  - code: "1000"
    name: "US Headquarters"
    currency: USD
    country: US
    is_parent: true
    volume_weight: 0.4

  - code: "2000"
    name: "European Hub"
    currency: EUR
    country: DE
    parent_code: "1000"
    volume_weight: 0.3

  - code: "3000"
    name: "Asia Pacific"
    currency: JPY
    country: JP
    parent_code: "1000"
    volume_weight: 0.3

intercompany:
  enabled: true

  transaction_types:
    goods_sale: 0.5
    service_provided: 0.2
    management_fee: 0.15
    royalty: 0.15

  transfer_pricing:
    method: cost_plus
    markup_range:
      min: 0.05
      max: 0.12

  elimination:
    enabled: true
    timing: quarterly

SyntheticData Documentation