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Treatment of PUP- when Associate sells to parent

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Treatment of PUP- when Associate sells to parent

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • September 6, 2022 at 9:07 am #665362
    Maimoona5998
    Participant
    • Topics: 7
    • Replies: 8
    • ☆

    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?

    September 11, 2022 at 8:45 pm #666171
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6706
    • ☆☆☆☆☆

    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

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