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syed shahab
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in the lecture regarding views on 6.2 adjustments to group and associate it is explained as when A sells good to P DR retained earning W5 cr inventory in SFP… my point is if A has sell goods to P why do we DR retained earning as P has not made profits on selling the goods.
P2-D2
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Hi,
I think if you listen to the video you will hear me explain it but we adjust the group RE as even though A has sold the goods it is the group that has had the influence and so we will adjust the group RE on the SFP. Don’t forget that this is effectively where A’s profits are recorded as we include our share of A’s profits within the group RE.
Thanks
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