How do upstream and downstream inventory transfers differ in their effect in a year-end consolidation?

What will be an ideal response?


If the sale of inventory is downstream (from parent to subsidiary), any unrecognized gross profit on the transfer does not affect the calculation of noncontrolling interest. When the transfer is upstream (from the subsidiary to the parent), the gross profit on the transfer is associated with the subsidiary. The gross profit on goods that the parent still owns should be deducted from the subsidiary's income which may be allocated between the controlling interest and the noncontrolling interest's share of the subsidiary's earnings.

Business

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During 2012–2013, currency speculator George Soros made a lucrative currency trade. Having expectations of a future depreciation of the yen, Soros made big bets against it. He sold large amounts of yen, pushed its value down, and profited by re-buying the yen when its price bottomed out. What Soros was engaging in was a

a. long position. b. short position. c. premium position. d. discount position.

Business

The internal forces, such as the factors of production and the activities of the organization, are called the uncontrollable forces.

Answer the following statement true (T) or false (F)

Business

Virginia and Dan each own investment realty that they would like to trade. Virginia's property is subject to mortgage debt of $2,000 and has a net of mortgage value of $6,000. Dan's property is subject to mortgage debt of $30,000 and has a net of mortgage value of $5,000. Virginia and Dan agree to exchange properties and assume each other's debt. Dan pays Virginia $1,000 cash, and the exchange is completed. What is the gross selling price of Virginia's property?

A. $2,000 B. $6,000 C. $8,000 D. $5,000 E. $35,000

Business

The quality loss function indicates that costs related to poor quality are low as long as the product is within acceptable specification limits

Indicate whether the statement is true or false

Business