Veränderungen im Anlagevermögen

Changes in Assets

Tricky describes the way to eliminate intercompany transactions when a sale or transfer of assets occur. It is important to track the historical cost and accumulated depreciation accounts. If you are able to do this individually then it becomes easier to follow the logic of the eliminations necessary in each period. The elimination will be the gain or loss, the accumulated amortization to date and the difference between original cost and sale or transfer price. The consolidated balance should show the original cost, not the cost it was sold at if the sale price was lower than the original buy price (with an attributable gain that will be eliminated and accumulated amortization restored through a worksheet entry together).

Worksheet elimination 3,000
Consolidated balance 9,000

Parent			Subsidiary
Asset	9000		Asset	6.000
Accumulated Amort.		5400	Accumulated Amort.	-
Net Asset		3600
	9000	9000


Cash	€ 6.000		Cash	-€ 6.000
Gain on Sale		2.400
Asset		9.000
Accumulated Depreciation	5400
	€ 11.400	€ 11.400

December 31, YR of Sale
Machine	€ 3.000,00
Gain on Sale of Machine	€ 2.400,00
Accumulated Depreciation		€ 5.400,00
	€ 5.400	€ 5.400

If it was inventory sold, from the consolidated entity’s perspective, this transaction never occurred because it does

not involve an unrelated party. The Year-End-Worksheet elimination needs to return the inventory to its original historical cost , while the Parent´s gross profit is also to be eliminated by adjusting Sales and Cost of Goods Sold.

Debt Transactions

Direct or indirect transactions exist between parent or subidiaries as one unit makes a loan directly to the other. In a direct event, one entity make a loan directly to its consolidation partner and results in an additional worksheet

elimination that removes the notes payable and notes receivable, any accrued interest receivable or payable, and any accompanying interest expense or interest revenue. For all periods the note is outstanding, the amounts in the worksheet elimination for the notes payable, notes receivable and interest expense and interest revenue will exactly offset because the two units are recording the loan using the same dollar amount and interest rate at the date of the transaction.

When one unit of a consolidated entity borrows from an unrelated party and the other unit of the consolidated entity acquires the debt instrument from the unrelated party, this type of debt transactions is called an Indirect intercompany debt transaction.