Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Associate

This topic has 1 reply, 2 voices, and was last updated 4 years ago by P2-D2.

Viewing 2 posts - 1 through 2 (of 2 total)

Author

Posts
February 7, 2018 at 9:22 pm #435769
ajjajj
- Topics: 18
- Replies: 47
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
February 17, 2018 at 7:33 am #437695
P2-D2
Keymaster
- Topics: 4
- Replies: 6301
Hi,

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
Author

Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.