What it is
In consolidated statements, intercompany balances and transactions eliminate in full. They only eliminate cleanly if both entities recorded the same amount, so the first step is a reconciliation of each pair and an explanation of every difference.
This workbook lists each intercompany pair by type with the amount per each entity’s books, splits the difference into in-transit and timing items and errors or disputes, flags unreconciled amounts, generates the elimination journal entries by type, and calculates unrealized profit in inventory still held by the buyer.
When to use it
- Auditing consolidated financial statements of a group.
- Closing a consolidation where intercompany balances do not agree.
- Testing intercompany pricing, cutoff and unrealized profit.
What’s inside
- Pair-by-pair reconciliation of balances and transactions with reconciling items
- Status flags: agrees, reconciled with items, unreconciled
- Elimination entries by type that must balance
- Unrealized profit schedule for goods still held at year end
Standard cited
This template follows ASC 810 / AU-C 330. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 330 explained.
Questions
Why must differences be cleared before eliminating?
The workbook eliminates the smaller of the two recorded amounts, so any remaining difference stays in the consolidated statements until it is explained and corrected, for example by recording a transaction in transit. Unreconciled differences often mean a transaction recorded on one side only, a cutoff error or an error in one entity’s books, and a plug hides it.
How is unrealized profit calculated?
The buyer’s inventory still on hand at year end, valued at the buyer’s cost, times the seller’s gross margin on the sale. It is eliminated from cost of sales and inventory until the goods are sold outside the group.
Does this cover noncontrolling interest and foreign subsidiaries?
No. It is a worksheet for eliminations, not a full consolidation. The noncontrolling interest share of eliminated profit, foreign currency remeasurement and variable interest entities need their own treatment.
Related templates
- Trial Balance Template with Mapping (Excel)
- Related Party Questionnaire for Management (AU-C 550 / ASC 850)
- Summary of Uncorrected Misstatements (AU-C 450)
- Audit Planning Memo (AU-C 300)
Last updated 11/05/2026. All free templates.