> For the complete documentation index, see [llms.txt](https://smartbooks.gitbook.io/smartbooks-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://smartbooks.gitbook.io/smartbooks-docs/consolidation/intercompany-setup/specification-of-intercompany-accounts-balance-sheet.md).

# Specification of Intercompany Accounts - Balance Sheet

You can assign intercompany accounts at the subfolder level within the consolidated financial accounts, which means placing them into dedicated subfolders. To customize their behavior, click on the subfolder options, note that the available settings differ for Profit and Loss and Balance Sheet reports.

## **Balance Sheet Intercompanies Settings**

In the Balance Sheet, you can configure intercompany settings for subfolders using the following options:

* **Not Set:**\
  No specific intercompany behavior is applied. Choose this option if no intercompany adjustments are required for that subfolder.
* **Group Companies:**\
  All participations in group companies must be grouped under the folder configured with the "Group Companies" behavior.
* **Equity:**\
  All equity accounts should be consolidated into a single folder with the behavior set to "Equity."\
  Once these two behaviors are in place, an additional account—**Group Equity Difference**—will appear. This calculated line verifies that the eliminated participations and equity positions match. Discrepancies may arise if, for example, group equity is updated monthly while participations are adjusted only once a year. In such cases, the Group Equity Difference account reflects the variance and is placed within the Group Equity folder to ensure proper closure.
* **Intercompany Transactions:**\
  When you assign the "Intercompany Transactions" behavior to the subfolders containing intercompany transactions, the system checks that all eliminations sum to zero. If they do not, the **IC Difference Balance Sheet** account will display the discrepancy, indicating potential issues. Reviewing any non-zero values in this account can help you identify oversights in specifying intercompany accounts or detect improperly booked intercompany transactions.