purp

If parent buys from subsidiary, the pup adjustment on the PorL is to increase CoS and on the SoFP we reduce the inventory When calculating working W3, the pup is deducted from the subsidiary's retained earnings at today's date The same adjustment is made whe the sale is from parent to subsidiary except the adjustment in working W3 is in the parent's retained earnings The cancellation of the intra-group trade is effected simply by reducing revenue and cost of sales, $ for $ on the consolidated PorL I don't understand your entry "Do we put the unrealised profit in Net Assets?" If you mean "Do we reduce combined inventory?" then, yes

"If parent buys from subsidiary, the pup adjustment on the PorL is to increase CoS and on the SoFP we reduce the inventory" we CR COS and DR sales, CR inventory and DR RE= P buys stocks from S , this could be said that S sold to P? if parent sells to Sub or (Sub buys from P) we DR sales and COS RE then CR inventory and DR RE. of unrealized profits. so only difference is if P sells to S then adjustment in RE rather than working: net assets cal, if S sells to RE adjust it in the net assets?

Correct!

If the sub sells to the parent, the parent's inventory is reduced?

If sub sells to parent, sub's retained earnings are reduced and the CONSOLIDATED inventory is reduced. It doesn't matter, so far as the inventory is concerned, whether the sub's or the parent's inventory is reduced. What IS important is that the subsidiary's retained earnings are amended Ok