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Consolidation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Consolidation

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by AvatarP2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • August 17, 2019 at 10:23 am #527846
    Avatarsaurabhnaik7
    Participant
    • Topics: 3
    • Replies: 0
    • ☆

    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?

    August 18, 2019 at 7:13 am #527916
    AvatarP2-D2
    Keymaster
    • Topics: 4
    • Replies: 7232
    • ☆☆☆☆☆

    Hi,

    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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