How to Book Intercompany Due Diligence Fees
Recording the recharge of costs incurred by a HQ M&A team performing vetting for a subsidiary's local acquisition.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Professional Fees - Due Diligence | Debit | 50,000.00 | - |
| Intercompany Payable | Credit | - | 50,000.00 |
💡 Accountant's Note
If a central team performs the financial or legal due diligence for a local entity's growth, those internal costs must be recharged at an arm's length rate.
Practitioner & Systems Framework
💻 ERP Architecture
Assign a specific 'Deal Code' to all related labor and third-party costs for easy recharging.
⚠️ Audit Flags
Capitalization versus expensing of M&A costs across different jurisdictions.
📄 Required Documentation
Due diligence report summary and evidence of the hours worked by the central M&A team.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
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