Unrealised profit adjustment in consolidated balance sheet of associate

I could not get the calculations but theoretically, if parent made a sale, all PURP will be charged in the parents books. If, Subsidiary/ associate made the sale, then all PURP will be charged between the H and X in their ownership ratio. In Income statement:

• If A is the seller - reduce the line “share of A’s PAT”

• If P is the seller - increase P’s COS

In balance sheet group accounts

• If A is the seller - reduce A’s Retained earnings and P’s Inventory

• If P is the seller - reduce P’s Retained Earnings and the “Investment in Associate” line

  I hope someone will post a solution for this.

Originally posted by : yasaswi gomes

I still did not get it. Many websites are telling us to reduce the sale cost from group sales and cos. Then, increase cos by purp and reduce inventory by purp. 

But either for parent to sub or sub to parent intragroup sales, we use consolidated reserves. I am not able to get hold of the third entry example. Don't foegwt the dta.