Field notes
Intercompany Timing Differences: Finding Them Before Elimination Day
Not every unmatched intercompany balance is an error. Goods shipped on the last day of the month may sit in one entity’s inventory and another’s in-transit account. Management fees accrued in Taipei may clear in a subsidiary’s books a week later. Foreign-currency revaluation can push both sides apart even when the underlying NTD amount agrees.
Start with a pair-wise matrix: for each counterpart pair, compare AR and AP at period end, then age the difference. Timing items usually reverse in the next period; FX residuals should reconcile to the rate table your group uses for translation. Only after those explanations remain should you treat a difference as a true mismatch that needs an adjusting entry.
Document each residual with a short note and an owner. Auditors accept residual differences when they are small, explained, and consistent with prior practice. They escalate unexplained plugs that appear only at consolidation time.
A useful habit for multi-entity groups in Taiwan is a mid-month intercompany check—not only at month-end. Catching a missing invoice while both bookkeepers are available beats reconstructing the story from email threads during audit week.