Page 17 - PowerPoint Presentation

CONSOLIDATIONS AFTER THE DATE OF ACQUISITION

Property, Plant & Equipment (PPE)

• Unrealised profit included in property, plant and

equipment

• When one entity in a group sells an item of property, plant

and equipment to another entity in the group, the profit

made by the selling entity is seen as unrealised from the

viewpoint of the group for as long as the asset is held

within the group.

• The profit of the group must be decreased with the amount

of unrealised profit, and the tax expense must be adjusted

accordingly.

• The above-mentioned consolidation adjustments will be

made every year until the asset is sold to a party outside

the group and the profit is realised from a group viewpoint

17