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P. 7
CONSOLIDATIONS AFTER THE DATE OF ACQUISITION
The elimination of common items
• Movement of assets between entities in the group
• If an entity in a group records an unrealised profit
resulting from a transaction with another entity in the
group, this unrealised profit must be excluded in the
preparation of the consolidated financial statements of
the group, and the tax expense must be adjusted
accordingly.
• Examples of items that must be eliminated
• Unrealised profit in closing and opening inventory
• Unrealised profit included in property, plant and equipment
• Dividends of the subsidiary
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