[bube]

Hi Mike

Let me summarize on the solution above :
The parent ha as AUCs sold an asset classified to the subsidiary.
To record the sale the parent should post the following :

Dr Receivable 720
Cr Revenue 600
Cr VAT 120

Dr CoS 585
Cr AUC 585

The subsidiary has posted the following :

Dr PPE 600
Dr VAT 120
Cr Acc.Payable 720

To eliminate the intragroup transaction :
Dr Acc.Payable 720
Cr Acc. Receivable 720

Dr Revenue 600
Cr PPE 600

But what happens to cos and unrealised profit?
Also the asset was AUC in the parent but it will be amortized by the subsidiary. Doesn’t amortization have an effect in further consolidation ?
Could you please share your thoughts ?
Tnx

[bube]

Yes it is, with one more entry
Dr AUC 585
Cr Cos 585

Profit on sale is 15

[bube]

The parent has posted a debit on receivable, vat and revenue on credit as one je and a credit on auc and debit on cost of sales.profit on sale is 15 $(correction to the question above).
The subsidiary has posted a debit on ppe and vat, credit on accounts payable.
The subsidiary will amortize the asset.
Is the same answer as above applicable?
Tnx

[bube]

I have a specific situation where the parent has sold an asset classified as asset under construction to the subsidiary in amount of 600 dollars. The asset is AUC so there is no amortization. The parent has issued an invoice to the subsidiary and recorded an income in the total amount of 600 dollars and VAT, no profit or loss on sale. The subsidiary has a liability for the sale made. How is this transaction eliminated in consolidation?
Tnx

[Author]

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