Page 21 - PowerPoint Presentation

CONSOLIDATIONS AFTER THE DATE OF ACQUISITION

Property, Plant & Equipment (PPE)

• Unrealised profit included in depreciable

property, plant and equipment

• any unrealised profit made on the sale of PPE by

one entity in the group to another entity in the

group, must be eliminated.

• The buying entity will calculate depreciation on the

cost price of the asset (which includes unrealised

profit). This excess depreciation must be written

back.

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