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CONSOLIDATIONS AFTER THE DATE OF ACQUISITION
Example - Inventory
• Note that the profit for the year and the retained earnings of B Ltd are not adjusted because it
is not B Ltd that is making the unrealised profit, but A Ltd.
• Therefore the unrealised profit in the inventory will not be shown in the analysis of owners'
equity of B Ltd. The adjustments will only be taken into account in the consolidated statement
of profit or loss and other comprehensive income (profit or loss section).
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