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Hi sir,
may i ask for non-controlling interest at reporting date,is there a need to minus unrealised profit for NCI?The BPP textbook and practice kit differs.thank youIt depends who originally sold the inventory that remains.
If the subsidiary has the inventory, then it must have originally have been sold to them by the parent and the unrealised profit is subtracted from the retained earnings of the parent – the NCI is not affected.
If the parent has the inventory, then it must have been sold to them by the subsidiary and so the unrealised profit is subtracted from the retained earnings of the subsidiary – the NCI is therefore affected.
(I don’t think BPP does differ between the textbook and revision kit – it is probably that in different examples the inventory was in different companies.)
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