What is inter company?

Question

Accepted Answer

Inter company refers to transactions or activities that occur between two or more companies within the same corporate group.

Inter company transactions involve the transfer of goods, services, or funds between different entities within the same parent company.
These transactions are typically recorded in the financial statements of each individual company involved.
Inter company activities can include inter company sales, inter company loans, inter company service agreements, etc.
The purpose of inter company transactions is to allocate resources, share costs, or consolidate financial results within the corporate group.
For example, Company A may sell products to Company B, which is a subsidiary of the same parent company.
Inter company transactions must be properly documented and accounted for to ensure accuracy and compliance with accounting standards.

Accepted Answer

The recording of financial transaction between two different entities that fall under the same parent company.

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