Sir if we were working with Consolidated Statement of financial position The unrealised profit.
If the seller is the parent we deduct unrealised profit from group retained earning in |W5 .
if the seller is subsidery we deduct the unrealised profit from the net asset at reporting date in W2,
Sir i am confused with that if the seller is subsidery and the unrealised profit made in still in the inventory what will be we do please explain.
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Consolidation
5y ago#1I don't know what you mean by W5 and W2 :-)
The unrealised profit in inventory is always subtracted from the group inventory in the consolidated SOFP.
If the goods had been sold from the parent to the subsidiary then the PURP is subtracted from the retained earnings of the parent when we come to consolidate.
If the goods had been sold from the subsidiary to the parent, then the PURP is subtracted from the retained earnings of the subsidiary when the come to consolidate.
Have you watched my free lectures on this? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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