Hi,
I have an example like this:
Parent Co (P) sell a machine to Subsidiary (S) with agreed value $3000.At the time of sale,carrying amount of machine is $2000.The estimate useful life of the plant at the date of sale was 4 yrs.Depreciation on straight line method.
Can you please tell me how to calculate the unrealise profit, how it impact to other such as: Retain earning of both P and S and how to show in Consolidated SOFP ?
Thank you!
ACCA Forums
FRTreatment for intragroup sale fix asset
12y ago#1In P's records, make the adjustment for pups.
Calculation of pup? $1,000 (that's sale value less carrying value).
Over 4 years = depreciation of 250
Pup is therefore 1,000 less 250 = 750
In working W3, consolidated retained earnings, in the P column, deduct 750
In the combined total for TNCA, deduct 750
Ok?
yeb.Can i understand the depreciation of 250 like this?
In P if not sell to S the Depreciation would be 2000/4 = 500
Sell to S would record Depreciation at 3000/4 = 725
Thus the dif is 250,is it the same way of your to get it?
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