IC profit is the profit made when one group entity sells to another entity of the same group (IC). The IC profit is generated at the selling entity and is the difference between the revenue and the local cost at this entity. At the end of the reporting period, all IC (also unrealized) profit is calculated and rolled up along the value chain and is visible in every business process. For the consolidation process, the IC profits are mainly relevant in the following areas:
Profit in inventory: Value of the IC profit for global materials that are held in stock in the various companies (in the financial value chain)
Profit on stock in transit: The IC profit for goods shipped but not yet received by the IC receiver needs to be considered from the inventory perspective for all materials traded between the companies
Profit on goods sold externally: The IC profit generated when goods are sold to the market.
GVC can be used to calculate UPI at any point of a value chain.