- This topic has 3 replies, 2 voices, and was last updated 9 years ago by
.
-
Posts
-
Thanks for the great lectures.
I have a question regarding the lecture for transfer of non-current assets.
You said that the adjustment is done in the selling company.
So if I sell my only non-current Asset to a subsidiary at a profit. Does it mean I should carry forward negative TNCA in the selling company after the PUP Adjustment?
Nice try!
No, when I say that the adjustment is done in the selling company, this adjustment is done for consolidation purposes only
The adjustment is not actually written in to the records of the selling company
The reason that I have said this expression is to ensure that the adjustment to retained earnings is correctly allocated
For example, if it were the subsidiary that had recorded the transfer at a profit, the pup adjustment would affect the calculation of the nci and the affect on the consolidated retained earnings is that the parent’s share of the subsidiary’s post-acquisition profits would be reduced whereas if it were the parent that has recorded the transfer at a profit, that adjustment will have no affect on the nci
Clear?
- You must be logged in to reply to this topic.