SBR Notes Example 4 Chapter 4

Good morning and Hope you are doing wrll

What about the treatment of loss of $5Mln (from following statement)?

{Vader sold goods to Maul for $20 million at fair value following the acquisition. Vader made a loss on the
transaction of $5 million and none of the goods sold had been sold outside of the group by year-end.}

What do mean by the term Arms length? And why do not realise the loss ?

Thank you