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Why would you have to remove the unrealised profit from the inventory?
I get that it is the amount that is left from an intra-sale that was not sold externally.
so if its left, shouldn’t it be just added to inventory?i can memories that for all intra-trade you just deduct it but im not sure why you would do that for this particular case.
please help
The consolidated accounts only want to value the inventory at the cost to the group. Inventory that was bought by one company from the other company includes the profit that the other company was adding on to the cost. This is the PURP and therefore needs removing.
Have you watched my free lectures on this?
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