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Sir in the groups chapter specifically in the SPLOCI example you kept saying that if the transaction is at arms length then there is no adjustment for the loss.
That is when there is intra group sales.
So what is this arms length?Please can you give me a page reference as I can’t see this in our notes
Page number 21 – Groups Chapter. In the video specific to SPLOCI example, you stated that if u make a loss on a transaction then the assumption is that the loss it at arms length so don’t adjust it.
You stated in the video that if its an intra group loss then do not adjust it particularly if its at arms length.
SO what do you mean by arms length is my question !!
And should the realized and unrealized loss also not be adjusted?Totally confused with regards to intra group loss.
Vader sold the goods at a loss at a figure which was FAIR VALUE.
It is tempting to adjust for the negative PUP of 5 – but if we do this we would increase the value of the inventory ABOVE fair value. This is not allowed because inventory must be at the LOWER OF COST AND NRV (or, if you prefer, fair vale).
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