Consolidated Balance Sheet

How to solve the attached problem... Please explain


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Quick Summary
This discussion clarifies the treatment of unrealised profit in consolidated balance sheets, specifically concerning associates accounted for using the equity method. The consensus is that unrealised profits from intra-group sales should not be included in the cost of investment. Instead, they are adjusted within the consolidated profit and loss statement. This approach aligns with basic accounting principles, even though IAS 28 doesn't explicitly detail this scenario.

Can you please post the problem, download is not clear.

Accounting of associate is done using equity method
so go for it u will be able to solve it

My doubt is whole unrealised profit(50+60) is to be adjusted to consolidated p&l or cost of investment?? 

Hi, I searched all of the resources that I have and finally understood by basic principles that cost of investment does not include unrealised profit because, assets, expenses, liabilities are not consolidated in parent books. Just group share of associate profits in P&L and Investment in associate in Balance sheet are recorded. So unrealised profits are treated like below. It does look like a ‘Holy cow’ to me because Indas 28 did not prescribe any treatment for intra groups sales and unrealised profits.

https://www.acowtancy.com/textbook/acca-fr/preparing-group-accounts/associates/notes

But I’m sure, that an associate has to treat gain from revaluations, inventory and non current assets as unrealised profits treatment as per separate financial statements and just carry the profit and cost of investment to consolidated statements. Cost of investment does not consider unrealised profits.

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