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Hi Sir,
Can you please explain to me why is the P% of the Unrealized Profit is deducted from the Investment in Associate when the Parent sells goods but not the associate
AND
The P% of the Unrealized Profit is deducted from the Share Profit of the Associate when the Associate sells goods but not the Parent?
Would greatly appreciate if I get to understand the true meaning behind that sir
Thank You!
I think they just had to make a decision. I’ve seen varying approaches over the years and this is the latest.
More of an FR than SBR topic (thankfully 🙂 ). Remember that in SBR your numbers don’t always have to agree, as long as your explanations are clear.
But still sir is there a specific reason behind it?
Please be kind enough to explain or refer any articles that I could go through in this regard.Cause I feel like just memorizing the equation will not beneficial in the long term.
All I can do is refer you to paragraph 28 onwards:
But, as stated previously, it’s FR not SBR
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