Consolidation Concepts to be kept in mind

Things to keep in mind while doing consolidation

1. Elimination of intercompany entries -  Elimination of entries which are recorded within internal subsidiaries as we don't want to include them in our consolidation as we need to see the true picture of third party transactions.

2. Eliminate Minority Interest - Eliminating minority interest percentage value from the retained earnings account so that true picture of how much the company has the holding percent is shown in financial results.

 Earned and Unearned Discount in Receivables

Lets understand this in easy words

1. Earned Discount - Given to the customer if the payment is received before the payment term expiry. It is given according to the setup done.

2. Unearned Discount - Given to the customer after the payment terms expiry and if the discount is to be given intentionally over and above the invoice amount.