- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
Lets say , P Co held 80% of S and 40% of A , during the year S sold some goods to A for $10,000 ( cost $8,000 ) , in the end of year none of the goods have been sold .
I wonder how to deal with the the unrealised profit , since the transaction are between the Subsidiary and Associate rather than Parent with Associate or Parent with Subsidiary .
Also , thanks for your reply for mine question each time .
The Interpretations Committee say that is appropriate to eliminate the GROUP’s share of any unrealised profit that has arisen involving a trade with the associate
Make the $2,000 (yes, $2,000) adjustment in the associate’s retained earnings
Then take the parent’s share of the associate’s adjusted profit after tax, as normal
The entries would have been the same whether it was associate selling to parent or subsidiary or parent or subsidiary selling to the associate
Make the adjustment IN FULL in the associate’s column of working W3 and then take the parent’s percentage of those adjusted associate profits
OK?
- The topic ‘Transaction between Subsidiary and Associate’ is closed to new replies.