For each A→B transaction: remove revenue in A and expense in B (P&L); receivable in A against payable in B (balance sheet)
Intercompany eliminations are the adjustments that remove sales, purchases, loans and balances between entities of the same group from the consolidation, so the group's result and balance sheet reflect only transactions with third parties.
How it is calculated
For each transaction between A and B: remove the revenue in A and the expense in B (P&L), and the receivable in A against the payable in B (balance sheet).
Example with numbers
A invoices B 20 for services. In the consolidation the 20 of revenue in A and 20 of expense in B are removed; if B has not paid, so are the 20 receivable and 20 payable.
How Fibady does it
In Fibady, intercompany leaves the consolidation because it is excluded: accounts flagged as intercompany, or entries tagged as intercompany, are left out of the consolidation group's total. It does not eliminate itself: the accounts have to be flagged or the entries tagged. Differences between what A and B have booked, and unrealised profit in inventory between group companies, are resolved in the accounting, outside Fibady.