IntraGroup Transactions

Question 1

Downstream Transaction

Parent sells to Associate

Answer 1

No GOBP if FV=NAV

Question 2

Group JE

Answer 2

DR: Investment
CR:Retained earnings (% holding)

Current year profit:
DR: Investment
CR: Share of profit of associate

Fair value adjustment:
DR:Investmet
CR: FV adj (P/L)

Question 3

Sale of inventory

Answer 3

PY
DR: RE—-Tax expense—NCI (Diff from two)*20%
CR: COS–RE—————–RE

CY
DR: CO———-DT—-NCI (SFP) (Diff from two)*20%
CR: Inventory–Tax expense(P/L)