INTERCOMPANY LOANS

Intercompany refers to transactions and relationships that occur between entities within the same parent company. These transactions can involve the sale of goods, services, loans, or other financial exchanges between a company and its subsidiaries or between subsidiaries themselves. Intercompany accounting is the process of tracking and recording these transactions to ensure accurate financial reporting and compliance. 

• Internal Transactions:
  Intercompany transactions are internal to a company group, meaning they don't involve external parties. 

• Legal Entities:
  These transactions occur between legal entities within the same parent company, such as subsidiaries. 

• Accounting Focus:
  Intercompany accounting is crucial for accurate financial statements, as transactions must be eliminated or adjusted to avoid double-counting. 

• Compliance and Reporting:
  Proper intercompany accounting ensures compliance with accounting standards, tax regulations, and reporting requirements.