Equity accounting – associates

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April 12, 2019 at 9:25 pm #512146
asan505
Member
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Which transactions are eliminated in equity accounting.

For example: Company A owns 20% in Company B. Both are insurance companies. Company B sells life insurance policies to Company A. Should this transaction be eliminated or not and if yes what would be the entries.

Thank you
April 16, 2019 at 8:30 pm #513152
P2-D2
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Hi,

There are no elimination of intra-group transactions or balances as the associate sits outside the group. We only adjust for the parent’s share of any PUP.

Thanks
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