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In group account. When subsidiary sell freehold property to parent. Why decrease in depreciation is recognised as a gain in the unrealised profit on disposal to the seller (subsidiary) ?
Hi,
When the asset has been transferred it usually results in a higher depreciation charge as the asset has been transferred at a profit. To record the original depreciation then we need to decrease the depreciation that has now been charged following the transfer. This is usually a point seen in FR and not SBR, so don’t get too worried about it.
Thanks
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