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When we remove Purp from retained earnings why do we remove the full amount
For the non controlling interest it should be seen as realised profit?I am trying to picture the scenario that is the basis for your question. Do you mean if a group company sells to the associate of the parent company?
When a subsidiary sells to a parent company we remove the purp on remaining unsold goods my understanding is that we remove the whole amount even the part that belongs to non controlling interest- meaning when we work out post acquisition retained earnings for the non controlling interest we first remove the PURP is this correct?
And if it is correct why do we do so?
Should it not be realised profit for the non controlling interest?You have asked the same question in the Ask the Tutor Paper FA forum, so please see my reply there.
(Have you watched our free lectures on this?)
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