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Hi Mike, in the exam of June15, Q.18 the solution states:
Investment at cost 1200
Share of post-acq. profit 150
URP in inventory -15
Carrying amount 1335However, in a similar exercise in my BPP book (ex.11. pag. 413) the solution only sums up Investment at cost + share of post acq. profit.
A note further specifies that “URP will be credited to group inventory, not investment in associate”.Thanks
LuiginaI’m assuming that in one example the sale is by the associate to the group and in the other example the sale is by the group to the associate
I’m going to say that it really does not make a world of difference
I always follow the first method (reduce the associate’s retained earnings by the full pup and then take the group’s percentage of those reduced retained earnings
So my answer always has the pup affecting the investment in associate (working W5A)
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