Hi Sir,
I would be grateful if you can assist me with the followings,
I have Kaplan study textbooks and it explains the trading with associate, as if,
the parent sell inventory to associate then we calculate the provision on unsold inventories to the limit of the investor then the following journal
DR group retained earnings
CR investment in associate
and if the associate sell the parent inventory we follow the same steps and same journal as
DR group retained earnings
CR investment in associate
having said that, I have another study material which I got from Chania and it says the followings;
Suppose parent sells inventory to associate
DR Retained earnings
CR Investment in associate
Suppose Associate sells inventory to Parent
DR Retained earnings
CR Group Inventory
can you please advise me which one is correct.
Thanks
Ask the Tutor ACCA SBR
Associate
8y ago#1Hi,
I'm unaware of any changes to the rules, and I would therefore say that the second source is correct.
I'll check the Kaplan material to see if what you say is correct, as it is the first time that I've seen the adjustment from associate to parent as this.
Thanks
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