When parent sells goods to subsidiary, why post acquisition PUP on inventory is not reduced from post acquisition profit of subsidiary in WN2 as it is from WN5? Doesn't the closing stock of subsidiary being higher reduce the cost of sales increasing profits?
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Consolidation
6y ago#1Hi,
If the parent sells the goods then the parent has made the profit, hence the adjustment is made in their books to remove the profit on goods unsold at the reporting date.
Thanks
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