Where an intragroup sale of an asset has been made and the asset was classified as inventory in the selling entity's books,but subsequently classified as plant in the buying entity's books,all depreciation recognised in the buying entity's books must be eliminated on consolidation.

Question

Quizplus · Accepted Answer

In consolidation, only the unrealized profit on the intragroup sale needs to be eliminated, not the depreciation recognized by the buying entity.

Where an Intragroup Sale of an Asset Has Been Made