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Hi Sir.
In the working of group retained earning we need to subtract Provision for unrealised profit(the full figure) if S is the seller. However if A is the seller we need to subtract the P’s share of unrealised profit right?Why the treatment of unrealise profit in the group retained earnings figure for associate and subsidiary different
Hi,
No, is S is the seller then we deduct the PURP from S’s net assets at the reporting date.
If A is the seller then we deduct P’s share of the PURP from the group retained earnings under equity accounting rules, which are different from what we do when consolidating.
Thanks
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