- This topic has 1 reply, 2 voices, and was last updated 2 years ago by
.
- Posts
According to the new changes in Acca syllabus, when the associate sells inventory to parent
In Cons.SOFP
we will remove the share of parent in PUP from group retained earnings and Group inventory.
There will be no impact on investment in associates.In Cons. SOPL
we will remove the share of parent in PUP from share of profit of associate and add it into COS.Is this the correct treatment?
Hi,
As per the update guidance in the syllabus for September 2022 onwards when the associate makes the sale, then the share of the profit is removed from the group retained earnings based upon the goods remaining in inventory at the reporting date. As the group now holds the inventory then the other side of the entry is to the group inventory on the face of the SFP.
I think this is covered towards the end of the updated class notes.
Thanks
- You must be logged in to reply to this topic.