Dear tutor,
In your lectures, the following entries are indicated for the removal of unrealised profit.
When parent sells to associate:
Dr Group retained earnings
Cr Investment in associate
When associate sells to parent
Dr Group RE/Share of profit of associate
Cr. Group inventory
However, in BPP and Kaplan books there is no difference between upstream and downstream transactions. The same following entry is indicated for both transactions.
Dr Share of profit of associate
Cr. Investment in associate.
Which approach is correct?
Ask the Tutor ACCA FR
Downstream - upstream transactions between associate and parent
6y ago#1I still think m approach is correct but I'd stick with the methods in the book.
Thanks
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