Page 17 - PowerPoint Presentation
P. 17

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
   12   13   14   15   16   17   18   19   20   21   22