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when the subsidiary sold some PPE to the parent half way through this year, the carrying value of the plant was $ 750000 and the transfer price was $820000. Whilst the subsidiary owned the plant it was being depreciated on a straight line basis over its remaining estimated useful life of 7 years. However, on the sale to the parent, the estimate of remaining useful life was revised to just 5 years. it is group policy to charge a full year’s depreciation charge in the year of purchase and none in the year of sale.
what is the adjustment in the records of the parent for the purpose of consolidation?
the answer to this question was nil, why?
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