Unrealized profits on intra trading

This topic has 1 reply, 2 voices, and was last updated 8 years ago by MikeLittle.

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August 5, 2017 at 8:08 am #400477
lavanithan
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hi MIke
if parent sells to subsidiary or vice versa why unrealised profit is added with cost of sales instead of reducing sales in CSCI ?
August 5, 2017 at 1:22 pm #400543
MikeLittle
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Because the elimination of the unrealised profit is effectively reducing the figure for closing inventory (that’s where this pup is hiding) so by reducing closing inventory, that has the effect of increasing cost of sales and that reduces the profit figure

OK?
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