When are gains on intercompany transfers of assets between an investor and a significant influence investment recognized as part of the investment income accounted for by the parent under the equity method?

Question

Quizplus · Accepted Answer

Gains on intercompany transfers are not recognized as part of the investment income accounted for by the parent under the equity method until the assets are sold to third parties or consumed. This is because the gains are not realized until the assets are no longer in the possession of the investor or investee.

When Are Gains on Intercompany Transfers of Assets Between an Investor