If a fixed asset is produced in-house and is sold to an affiliated company, the sales revenue of the retiring company must be reclassified from the point of view of the group. Any resulting IC profit/loss must be eliminated. The aim is to show the activity in the consolidated financial statements as if the asset had been produced and capitalized as a fixed asset. The production cost and the offsetting item on the revenue side are disclosed for the producing company. The asset is capitalized and depreciated by the acquiring company.

Enter the following financial and control parameters in the transferred assets table:

• Select the activity for the in-house production.

• Enter the source and destination items for the reclassification of sales revenue. Sales revenue is generally reclassified as "Other goods and services on own account".

• Since the asset is capitalized and depreciated at the acquiring company, you only have to specify the corresponding acquisition and production cost item, depreciation item, depreciation method, and so on for this company.

The system carries out the following adjustment entries:

• Sales revenue is reclassified at an amount equal to the production cost at the retiring company.

• Depreciation is adjusted for the eliminated IC profit/loss at the acquiring company.

• Finally, the production cost less depreciation is recorded at the acquiring company. In the following example, the asset is recorded at 9000 monetary units. This is the balance between the production cost of 10,000 monetary units (10,500 less 500) and the depreciation of 1,000 units (1,050 less 50).

The following overview shows the entries when in-house produced assets are transferred between companies: