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Sir when calculating the profit in example one ( chapter 9), I understand that we have to deduct 36000 unrealised profit from the profit made my Daunte but why is Depreciation on unrealised profit not added back .
Thanks in advance
What’s the second line in working W3 on page 176?
And #2 on page 175?
If you’re talking about working W1 (the profit split working where $36,000 is deducted from the Danute total profit and then added back into the profit for the post-acquisition period) depreciation is not applicable here as it will be Ausra that has charged the depreciation.
Only the $36,000 is reflected so far in Danute’s records
OK?
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