Page 9 - Finac2 Test 1 Slides - 3. Intra-Group Transactions

CONSOLIDATIONS AFTER THE DATE OF ACQUISITION

Inventories

Unrealised profit in closing inventory

• One of the most common forms of intragroup

transactions is the sale (usually at a profit) of

inventories by one entity to another in the same group.

• Where part of such inventories is still held by the

purchasing entity at the end of the reporting period,

the following applies:

• The total profit or loss arising from transactions within the

group, to the extent that such profit or loss is not realised, is

excluded in the determination of the total group profit (or
loss) or of the interest of the parent in the profit (or loss) of

any subsidiary.

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