Consolidated balance sheet- adjustment of unrealized profit included in stock

(Attachment given)

Suppose subsidiary Co (S) sold stock worth 30000 to Holding Co (H) in 40000. H holds 75% shares of S. But at last day of financial year, half of the goods remained unsold with H.

How will we treat it?

What is the reason behind this treatment.

In the book (photo attached) 5000 is deducted from total stock, and I'm okay with it.

But 5000 is also deducted as follows:(see attachment)

Profit and Loss:                                            200000

Add:H ltd share in revenue profit (75%).   28125

Less: Unrealised profit.                                ( 5000)

 

Why we are deducting whole 5000 from our share in profit in subsidiary. Why don't we deduct 75% of 5000=3750 because minority shareholders also have 25% share in subsidiary. They also should have 25%=1250 share in Unrealised profit.

What I am thinking wrong?


Attached File : 2596292 20190302131501 consolidated.pdf downloaded: 293 times
Replies (10)
yee akhri bench me baithne wake bache hote hi aise hai
I don't wanna insult you (although replying your comment is also an insult). I suppose you are AIR 1 in CA. If you know something related to question, let me know. I'm not here going to give you "bhaav".
@ Govind I'm really sorry for my comment.
I didn't want to insult you and say sorry again of I played with your 💓.
this is everything I can say and do.
I just made comment to make the it enjoyable like Ca Praveen Sharma sir say to us in during classes.
It's ok. Now tell me answer to my question (about consolidated financial statement).
Anyone here who know answer to my doubt. CCI is my last hope. (No need to say my teacher is useless). (Or do I need to DM you)
Yes agree with you, ICAI in its study Material stated the same ie when subsidiary sells goods at above cost price and some goods remains unsold, the unrealised profit also to be share by minority and not entirley by parent. It is absolutely a error noted
Is unrelieved profit adjusted witn adjusted with P/L A/c Conlidated P/L A/c
Is unrelieved profit adjusted witn adjusted with P/L A/c Conlidated P/L A/c
Is unrelieved profit adjusted witn adjusted with P/L A/c Conlidated P/L A/c

Hi Karnav,

could you please clarify the question. 

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