Note: This article applies to Spotlight Reporting. If you're using Spotlight Multi, please refer to our separate article.
When you work with a group of companies, there may be situations where one company within the group sells or buys from another. If you want to adjust your reports to account for these intercompany transactions, you can do this automatically in Spotlight.
You can set up your intercompany accounts from within the Customise Data option.
Note: Spotlight eliminates the full account balance for each month. In the data grid, eliminated accounts have an E icon next to the account name.
If the eliminations values don't automatically appear on your report, to show these you need to add the new versions of the relevant pages.
The Entity Analysis and Entity Balance Sheet Analysis pages will show your eliminations. You can use the Customise Columns option to choose a detailed or summarised view.
The FX Reserves account that appears in the balance sheet report is the foreign exchange rate difference between showing the Current Year Earnings based on monthly converted profit vs. year to date converted profit. This line is needed to balance the report.
If you want to combine this line with the adjustment row held in the Eliminate Accounts screen, ensure that each account has the same name. To amend the name of the balance sheet account, open the Customise Rows option, click the pencil icon and amend the name of the account.
If the organisations in the group use different currencies, there will be some exchange rate variances.
Spotlight posts these to the foreign exchange adjustment accounts in the profit and loss and balance sheet reports. By default, these are FX and other Adjustments on the profit and loss report, and FX Reserves on the balance sheet. If required, you can rename these accounts within the Eliminate Accounts option.
Note: These accounts capture the differences after eliminations, so that the net effect on profit is zero. If a larger value appears for the adjustment, please check that you’ve reconciled the intercompany accounts in your accounting system, and that you’ve selected all of the relevant accounts in Spotlight.
If you can't eliminate the full balance of an account because the account also contains other transactions, you will need to use a different method to deal with the eliminations. There are two options: