When preparing consolidated financial statements, what is the main reason we eliminate all intercompany transactions between and among a parent company and its subsidiaries?

Intercompany transactions almost always result in gains, and the conservatism principle says that gains should be deferred, while losses should be recognized immediately

The Sarbanes$-$Oxley Act of $2002($i$.$e$.,$ U$.$S$.$ Public Law $107-204)$ states that affiliated companies should not engage in transactions with each other

Management theory suggests that it helps eliminate problems with adverse selection

Commonly controlled affiliates represent a single economic entity, and an entity cannot engage in economically substantive transactions with itself