CH. 25 Example 3–PUP

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July 16, 2021 at 6:26 am #627887
sherlock221B
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Sir,

In this example, the Associate (BF) sells goods to the Parent (TR). The answer is given as D. Why is answer C incorrect?

Thank you
July 17, 2021 at 8:35 pm #628096
P2-D2
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Hi,

The direction of the sale is not taken into account for a PUP between the group and the associate using equity accounting. We will always process the PUP as shown in the class notes, where the credit is to the investment in associate.

Thanks
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