Equity method and transactions between subsidiary and associate

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May 22, 2018 at 1:40 am #453257
semerina
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Parent has interest in a Subsidiary (75%) and Associate (25%).

Subsidiary uses 40% markup to the cost of inventory. Subsidiary sold inventory to Associate -$200 (sale price). Associate still had 10% of inventory at the end of reporting period.

is it intragroup transaction and how you treat it?
May 22, 2018 at 3:17 pm #453384
f6ali
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It isn’t an intragroup transaction. It’ll be treated in the same way as any other sales invoice.

For Subsidiary:
Dr Cash/Receivable
Cr Sales

For Associate:
Dr Purchases
Cr Cash/Payables
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