In CAP financial operations, what must intercompany revenue and expenses do during the same financial period?

In CAP financial operations, intercompany revenue and expenses must always match during the same financial period to ensure accurate financial reporting and accountability. This matching principle is critical because it reflects the true financial position and performance of the organization. When revenue is generated through transactions between different entities within the organization, the corresponding expenses must be recorded to accurately represent the financial outcomes of those transactions.

By ensuring that intercompany revenue and expenses match, it prevents distortions in financial statements that could mislead stakeholders and management about the organization’s financial health. This practice also facilitates proper consolidation of financial statements across different entities, ensuring that financial data is reliable and consistent. This is particularly important in maintaining transparency and achieving compliance with financial reporting standards and internal monitoring practices.