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Dear sir
im wondering the transaction with the associates
is it the same treatment for upstream and downstream?
when the asociate sell goods to parents,will the share of pup also be deducted from parent’s retained earnings?In my notes and lectures I treat the pup arising from ANY and ALL transactions with associates in the same way … I ALWAYS adjust for the pup in the records of the associate (and NEVER in the parent)
This means that the parent automatically is charged with their share of the associate’s pup because the associates retained earnings for the year are reduced by that full pup
It also means that my answers differ from BPP and Kaplan answers but it’s considerably easier and quicker (and requires less thought!) if you do it “my way” and it cannot be a major mark loser
OK?
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