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Hello,
When did we adjustment it:-
1-when parent make Unrealised Profit.
2-or when subsidiary make unrealised profit.
When we adjust Net asset at reporting date?
When it has effect Non-Controlling interest?
Thank you for your help
Adjust in the “retained earnings” of the company which made the sale – ie the company which has recognised this profit when they sold the goods to the buying company.
So that answers your first two questions
We always adjust net assets in the Statement of Financial Position if the goods which include the unrealised profits are still in the possession of the group.
Nci are affected in the situation that the adjustment for unrealised profits is against the subsidiary’s retained earnings. When we adjust for the pup in the subsidiary’s retained earnings, that will reduce the value of the subsidiarys post-acquisition retained earnings and that in turn will affect the nci’s share of those post-acquisition retained earnings