Associates – BPP chap10 Activity 3

Dear Sirs,

Associate sells to parent therefore P holds inventory at year end.

Therefore, I think adj should be:
Dr Group RE/share of profit of associate (PL) 60,000
Cr group Inventory 60,000

NB: In OT video, Chris says not reduce investment in associate (SFP) when A sells to P.

BPP solution:
Dr Group RE/share of profit of associate 60,000
Cr investment in associate 60,000

Why is BPP not getting rid of unrealised profit held in inventory at ye?

Thank you