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Basic group accounts (F1 revision)

3.4 PUP adjustments and the CSOFP

A PUP is a provision for unrealised profits.

It will be required when:

 an intragroup sale occurs at a profit

 the goods are still held in the group.

ALWAYS adjust the SELLERS retained earnings in the CSOFP

If P sells to S:

Dr Retained earnings of P (W5)

Cr Inventory (CSOFP)

If S sells to P:

Dr Retained earnings of S (W2)

Cr Inventory (CSOFP)

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