When you post a batch of General Ledger intercompany transactions (an "ICT G/L" batch), Intercompany Transactions performs the following procedures for each detail distribution line in each entry:
- If the company specified in the distribution line is the same as the company specified in the batch header (in other words, if the originator and the destination are the same), the line is added to a General Ledger batch in the originating company.
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If the destination company for the distribution line is not the same as the originator, ICT creates detail lines, entries, and transactions, as follows:
- Creates a detail line for the originating company, for the same amount as the original line, to the loan account of the next company in the route.
- Creates an entry for each intermediate company in the selected route, with two detail distributions for the loan accounts of the previous and the next company in the route.
- Creates a transaction for the destination, with one side going to the account specified in the original distribution line in the ICT batch, and the other going to the loan account of the previous company in the route.
In summary:
- The originator gets one transaction detail in its G/L batch for each detail in the ICT G/L batch.
- Intermediate and destination companies get one balanced transaction for each detail when the destination is different from the originator.
Example: ICT General Ledger Batch Posting
Company A (the originator) enters a vendor invoice as a journal entry in an ICT G/L batch in the ICT company.
Note: The left column corresponds to the Originator field on the ICT Journal Entry screen. It indicates the company to which the detail belongs.
In this case, Company A wants to record the full credit amount in the Accounts Payable account, Expense 1 in the appropriate expense account, and Expense 2 in an intercompany loan account.
When the ICT G/L batch is posted, ICT creates two new general ledger batches, one in Company A's database, and one in Company B's.
The batch created in Company A has the following details:
The batch created in Company B has these details:
