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I was doing this question where premier had acquired sandford midyear and had to prepare the consolidated accounts. The problem is that sandford had made sales of 1 million each month of the year and related inventory left with premier was 2 million hence for URP it should be 2/12million × URP but when revenue was recorded only post acquisition intra group sales were subratracted , shouldn’t the sales of whole year should be subtracted?
No, because we weren’t in control of Sandford for the entire year. Consolidation is based upon the premise of control and, if we don’t control, we don’t consolidate
OK thanks sir