Hi,
Intragroup sales between parent & subsidiary or between subsidiary & parent, if the purp on unsold inventory is 100, shall I add it to cos and reduce inventory for both the sales or does the treatment differ depending upon the buyer and seller? I got the dta part.
Txs
For a PURP of 100 on unsold inventory, you must reduce the consolidated inventory value by 100 and increase the consolidated Cost of Sales (COGS) by 100. While the fundamental adjustment to the asset (Inventory) and the expense (COGS) is the same, if the sale is "upstream," you must ensure that the reduction in profit is allocated proportionately between the Group and the Non-Controlling Interest.
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