Intra-group balances
Intra-group balances are amounts owed between entities included in the same consolidation. They are removed from consolidated financial statements because a group presented as one economic entity cannot owe money to itself. The balances remain in each entity’s own records. Reconcile differences before elimination rather than forcing unmatched balances to zero; FA excludes assets-in-transit adjustments from its stated basic consolidation scope.
Worked example
The parent reports a $5,000 receivable from its subsidiary, and the subsidiary reports a matching $5,000 payable. Consolidation removes $5,000 from receivables and $5,000 from payables. The elimination itself does not change group profit.
Common mistake
Eliminating a trading balance is separate from removing unrealised profit in unsold inventory. A simple investment or associate is not consolidated line by line like a subsidiary.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | FR | Direct | Official assessment-window verification pending |
| ACCA | K1 | Direct | July 2027–August 2028 |
| ACCA | SBR | Direct | Official assessment-window verification pending |
| CIMA | F2 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: intercompany balances, intragroup receivables and payables