(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: 233 times
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