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Dear Tutor,
Please help me understanding how to treat the PUP between parent and assoc. I understand that only the % owned by the parent in the associate is to be deducted from the inventory
I read different sources, and found different approach:
1, same as for the Parent-Subsidiary, decrease inventory and increase cost of seller
2, other way around, as the inventory of the buyer is overstated, decrease the inventory and cost of the buyer
3, always adjust the amounts in Subsidiary, no matter if it is the buyer or seller (so the investment in assoc and the income from assoc adjusted)
which one is the correct approach?Thank you in advance!
If you’ve found three ways / methods, don’t you think that there could be three acceptable methods?
An expression from English idiom is that there’s more than one way to skin a cat (and no way is technically superior than any other way)
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Thank you, so whatever I use from the above, I won’t loose any points in the exam? There is no preference by the examiners?
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Thank you very much!
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