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Intra group

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Intra group

Viewing 4 posts - 1 through 4 (of 4 total)
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  • April 15, 2018 at 10:51 pm #446795
    zkaay
    Participant
    • Topics: 212
    • Replies: 98
    • ☆☆☆

    Hi sir,

    I have not understand this bit clearly could u plz explain it in simple way

    ( how to deal w intragroup profit/loss from transaction and inventory holding)

    For p/l

    Thanks

    Let me write an example so i can understand it better.

    Marchant sold inventory to nathon for 12 m at fair value. Marchant made a profit on transaction of 2 m and nathon still hold 8m in inventory at ye.

    April 19, 2018 at 9:34 pm #448180
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7231
    • ☆☆☆☆☆

    Hi,

    Can you be specific please about what it is exactly that you do not understand about the elimination of a provision for unrealised profit? If you use your own example above and answer it then I can help.

    Thanks

    April 21, 2018 at 11:13 am #448360
    zkaay
    Participant
    • Topics: 212
    • Replies: 98
    • ☆☆☆

    Hi tutor,

    To answer my previous example

    1 we have to eliminate 12 m from revenue and cos

    Then what do we have go do with figures 2 and 8 ?

    April 28, 2018 at 7:45 pm #449208
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7231
    • ☆☆☆☆☆

    Hi,

    Yes, you eliminate the $12m as you say but we still own 2/3 of the inventory ($8m/$12m) so we eliminate 2/3s of the $2m profit. This is done by adding the amount to cost of sales of the seller in the consolidation schedule.

    Thanks

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