Which statement about intercompany eliminations is correct?

• A. Intercompany eliminations are optional in FCCS and use one of the custom dimensions when enabled.
• B. Intercompany eliminations are generally required to remove the effect of transactions within the company
• C. Intercompany eliminations are required for sustainability reporting to show the company's waste output.
• D. Intercompany eliminations are needed when a company divests itself of a division

Answer: (B)

Intercompany eliminations remove intra-group transactions so the consolidated financial statements reflect only external activity. In FCCS, when you consolidate, you cancel out intercompany balances (like intra-group payables and receivables) and any profits embedded in intercompany sales or transfers. This ensures that revenue, assets, and profits aren’t double-counted and the group’s results show a true external performance. Because there will usually be some intercompany transactions in a corporate group, these eliminations are generally required. The other options miss the core purpose: eliminations aren’t about a mandatory custom dimension, sustainability reporting, or divestiture scenarios.