Intercompany Eliminations · Track 5 · Tutorial 5 of 9

Eliminate intercompany dividends

When a subsidiary pays a dividend, the parent records income and the subsidiary records a distribution out of its equity. For the group, the part paid to the parent is cash moving between its own companies: it comes out. The part paid to minority shareholders stays.

You will needDividends switched on and the accounts mapped, as in the Set up intercompany track. The dividend recorded in both companies’ books.

By the endCompany B’s December dividend eliminated for Company A’s 80%, with the minority shareholders’ 20% left in the group’s figures.

1Know what to eliminate

In December 2026 Company B, 80% owned by Your Group through Company A, declares and pays a dividend of AUD 50,000, recorded in 3300 Dividends Paid. Company A receives AUD 40,000 and records SGD 35,840.00 in 4200 Dividend Income.

Company B’s AUD 50,000 dividend, of which Company A receives 80%: Company A’s SGD 35,840 dividend income eliminated against AUD 40,000 of Company B’s dividends paid, leaving the minority’s AUD 10,000 — Only the group’s share is eliminated.

The group’s 80%	Company A’s dividend income against AUD 40,000 of Company B’s distribution. Both come out.
The minority’s 20%	AUD 10,000 paid to shareholders outside the group. It isn’t intercompany, so it stays: it reduces Non-Controlling Interests and shows as a dividend to them.

2Enter the elimination

Open Intercompany → Dividends, choose Dec-2026, and click + Add entry.
Debit Company A’s 4200 Dividend Income, SGD 35,840.00 at 1.0000.
Credit Company B’s 3300 Dividends Paid, AUD 40,000.00 at 0.8960, and click Confirm.

A dividend is usually a one-off, so a GL entry suits it — see Post a GL elimination entry. Date it in the month the dividend is recorded. Use the same rate on both sides, so the entry balances; a difference between them is an exchange difference.

3Know what the type accepts

Under Intercompany → Dividends, an entry’s lines can use Equity, Other Income, Accounts Receivable and Accounts Payable accounts. A dividend declared but not yet paid leaves a receivable and a payable: eliminate them in the same entry if they are in Accounts Receivable and Accounts Payable, or under Trade Receivables / Payables if the payable is in Current Liabilities.

4Check the month

Open the group’s Profit & Loss and Balance Sheet for December with Show Entities on.

Check

Dividend income is zero in the group column. Of Company B’s distribution, only the AUD 10,000 paid to the minority shareholders is left.

5If something goes wrong

The whole dividend disappears	The entry eliminated 100%. Eliminate only the parent’s share of the distribution.
The dividend income is still in the group figures	The parent booked it to an account the entry didn’t use, or in a different month. Check Company A’s books.
… cannot be used in this elimination type.	The account isn’t Equity, Other Income, Accounts Receivable or Accounts Payable. Check its type in the company’s chart.

Want more detail? See the documentation

Elimination Entries NCI — Non-Controlling Interest Intercompany Types

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