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Consolidation Lateral transactions

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Consolidation Lateral transactions

  • This topic has 3 replies, 2 voices, and was last updated 12 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • November 14, 2012 at 11:35 am #55305
    nomantufail
    Member
    • Topics: 17
    • Replies: 13
    • ☆

    Please guide me regarding treatment of interco. Transaction(sale of inventory) between two subsidiaries (lateral transactions).
    For example a 75% Subsidiary sold goods to 80% subsidiary. Closing inventory is (say) 1500 of which 300 is unrealised profit. I need to know the adjustments for
    1. Consolidated retained earnings
    2. NCI in statement of financial position(if any)

    Thanks and regards,
    Noman Tufail

    November 14, 2012 at 6:41 pm #107416
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Make the 300 adjustment in 75% subsidiary’s retained earnings and then calculate as normal

    November 14, 2012 at 8:39 pm #107417
    nomantufail
    Member
    • Topics: 17
    • Replies: 13
    • ☆

    Thx 4 reply sir
    It means that we would decrease NCI by 25% of 300 and decrease consolidated retained earnings by 75% of 300. And decrease inventory by 300

    November 15, 2012 at 6:39 am #107418
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    yes

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