Intercompany accounting represents the relationship among companies that are within the same group, normally enterprises having a holding company, and subsidiaries. The intercompany transactions are captured in the financial records of the subsidiaries that are involved in the intercompany.
There are several formats of intercompany transactions among the subsidiaries, and the following diagram illustrates these intercompany transactions formats:
As shown in the preceding diagram, there are three types, which can be explained as follows:
- Upstream: An intercompany transaction flowing from the subsidiary to ...
