Unrealised profit

This topic has 1 reply, 2 voices, and was last updated 9 years ago by MikeLittle.

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December 2, 2016 at 8:22 am #353079
@47@
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When the parent company is transferring an asset to its subsidiary at a profit, we deduct this profit from the consolidated retained earnings and we also deduct the excessive depreciation from the consolidated retained earnings, right??
December 2, 2016 at 9:11 am #353106
MikeLittle
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No, not quite

We deduct (in the seller’s column of working W3) the gain made on the transfer but we ADD back the excess depreciation, also in the seller’s column
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