Hospitality Groups · Track 1 · Tutorial 2 of 2

Clear intercompany items in a hotel group

The same items come round every month. This is how to clear each one in BrizoConsol, in the order that closes the month cleanly, with links to the accounting behind them.

You will needThe types set up, as in Set up intercompany types for a hotel group. The month loaded for every company.

By the endEvery typical intercompany item of a hotel group cleared for the month, with nothing left in Elimination Review.

1Know the items

Each arrow is an item to clear every month.

Each item is cleared under the type set up for it in Set up intercompany types for a hotel group.

2Clear each item

Item	Type	How to clear it	See
Base management fees	Management Charges	A rule on the fee accounts; Method 2 with FX for a hotel in another currency, with income and expense at the average rate.	Eliminate management charges
Incentive fees	Incentive Fees	A Method 2 rule with Timing and Review before posting, so a month the hotel hasn’t booked is reviewed, not posted to FX.	Eliminate management charges
Brand royalties	Brand Royalties	A rule on the royalty accounts.	Eliminate management charges
Rent paid by OpCos to PropCos	Rental / Lease Adjustments	A rule for rent against rent; an entry from the lease schedule when the OpCo recognises a right-of-use asset and lease liability.	Make rental and lease adjustments
Central recharges	Central Recharges	A rule on the recharge accounts, once every hotel uses the same recharge accounts.	Use Other Eliminations
Unpaid invoices between companies	Trade Receivables / Payables	A document entry at each month end, or a rule on dedicated intercompany accounts.	Eliminate trade receivables and payables
Refurbishment loans, and their interest	Intercompany Loans	A rule on the loan and interest accounts.	Eliminate loans and interest

A rule suits an item that recurs on accounts holding nothing else; see the Automate with rules track. When the accounts also hold outside business, clear the item from its invoices and bills instead.

3Close the month in order

Load every company’s month, so the rules run on the consolidation with both sides in place.
Enter the document entries for unpaid balances at the month end.
Enter the GL entries for one-off items in the month: dividends, asset transfers, new loans.
Clear Intercompany → Elimination Review, as in Work through Elimination Review.
Check each type on Review → Month End Status, as in Check eliminations on Month End Status.

Check

On the group’s Balance Sheet and Profit & Loss with Show Entities on, every intercompany line is zero in the group column, and nothing for the month is waiting in Elimination Review.

4Read more about the accounting

The BrizoConsol blog goes through the accounting behind these items for a hotel group, with worked examples:

Financial Consolidation for Hospitality Groups: How Multi-Entity Hospitality Businesses Get Clean Group Accounts

Hotel Group Consolidation: How to Eliminate Management Fees, Brand Royalties, and Intercompany Rent Across Multiple Properties

How to Consolidate a Hotel Group Where Each Property Operates Through a Separate OpCo and a Shared PropCo Holds the Real Estate

The Management Fee That Won’t Eliminate: How Hotel Groups Fix the Incentive Fee Consolidation Mismatch

PropCo/OpCo Hotel Leases: The Variable Rent That Doesn’t Appear on the Balance Sheet — and Why Your Consolidation Won’t Balance Without It

5If something goes wrong

An item is still in the group figures	Its accounts aren’t in a rule or entry, or one company booked it in another month. Check both companies’ books for the month.
The same rule waits in Elimination Review every month	Its method or tolerance doesn’t suit the usual difference. See Explain and clear intercompany differences.
A rule also eliminates outside business	The account isn’t only intercompany. Delete the rule and clear the item from its invoices and bills.

Want more detail? See the documentation

Elimination Entries Elimination Review

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