Intercompany transaction


Also found in: Acronyms.

Intercompany transaction

Transaction carried out between two units of the same corporation.

Intercompany Transaction

A transaction that occurs between two companies. For example, if a supplier sells to a retailer, this is said to be an intercompany transaction. It should not be confused with an intracompany transaction.
References in periodicals archive ?
At the consolidated level, accountants must eliminate the intercompany transaction so that no profit or loss is recognized until it's realized through a transaction with an outside party.
In calculating an entity's unhedged FX Gain/Loss, companies generally look to the rate at which intercompany transactions were booked, then revalue the transactions to the balance sheet rate.
In the recognition phase, any intercompany transaction that could lead to an adjustment of income by the IRS or a foreign tax authority is considered to be an uncertain tax position.
The purpose of this paper is to discuss and illustrate parent/investor accounting for these intercompany transactions when the parent/investor uses the full equity method, but does not consolidate.
To combat this perceived abuse in the past, many states (particularly separate return states where intercompany transactions are not eliminated) enacted intercompany add-back provisions for specific types of transactions (usually involving intercompany interest or royalties).
The ALP for intercompany transactions between controlled affiliates is a statutory requirement for proper tax compliance in the United States.
This result is intended to prevent consolidated groups from using intercompany transactions to dispose of assets without recognition of gain that would be taxable at the corporate level.
This uncertainty is compounded by the revenue authorities' increased scrutiny and sophistication in reviewing intercompany transactions.
In contrast to the single-entity approach taken under the consolidated intercompany transaction rules, Regs.
1502-13(d)(1)(i) explains that, for this purpose, the effect cannot be achieved to the extent a non-member reflects, directly or indirectly, any aspect of the intercompany transaction, e.
By rejecting distortion of income as a condition precedent in the intercompany transaction situation, the Court of Appeals in Wurlitzer and Campbell Sales held that the state may make an initial determination to require combined reporting without first determining whether there has, in fact, been distortion of income.
The two most significant provisions at this stage in the process are the intercompany transaction rules and the intercompany debt rules.