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Hello sir,
Concerning the intra group upstream transactions from a subsidiary to the parent, my question is as long as the subsidiary sales is weighted according to time apportionment when consolidating income statement and it is already including the intra group upstream sales to the parent meaning that it is also weighted accordingly.why the intra group upstream sales eliminated in full not weighted according to the time
apportionment as it is when added to the parent sales for consolidation ?
“meaning that it is weighted when added whereas eliminated in full”Thanks.
Hi,
The intra-group sales will be eliminated from when control was achieved. How to account for this depends on the information in the question.
If you are told the intra-group sales from the date of acquisition then you only need to adjust for these amounts given and you do not need to pro-rate.
If you are given the total sales for the year between the two companies then you would need to pro-rate these to get the sales since the acquisition date.
Thanks
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