ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 6, Problem 6.6Q
To determine
Intercompany transaction:
Consolidated financial statements are prepared by a parent company to consolidate the assets and liabilities of the parent and its subsidiaries. There may be some transactions between these companies which are called intercompany transactions.
To Indicate: The effect of the unrealized profits of an upstream or downstream sale of inventory on the income to the controlling interest.
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Students have asked these similar questions
Explain what effect will an upward asset revaluation have on subsequent periods’ profits
Under PAS 1, which of the followingitem is not included in the computation of profit?
Finance cost.
Post-tax gain or loss on discounted operations.
Unrealized gain in change in value of biological assets.
Unrealized gain in change in value of available-for-sale securities.
Following IFRS, which statement is false?
Group of answer choices
The revaluation surplus account is a specific account reported as an unrealized gain in the statement of comprehensive income.
If the revaluation initially increases the long-term operating asset's carrying value, the firm records the difference between the carrying value and the fair value (the unrealized gain) in the revaluation surplus account.
The revaluation surplus account is a specific account reported in other comprehensive income (OCI) in the statement of comprehensive income.
If a long-term operating asset's fair value decreases in subsequent accounting periods, after an earlier write-up, the firm reduces the revaluation surplus if it exists.
Chapter 6 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 6 - Why must inventory transfers to related companies...Ch. 6 - Why is there a need for a consolidation entry when...Ch. 6 - Prob. 6.3QCh. 6 - How do unrealized intercompany profits on a...Ch. 6 - How do unrealized intercompany profits on an...Ch. 6 - Prob. 6.6QCh. 6 - Prob. 6.9QCh. 6 - Prob. 6.10QCh. 6 - How is the amount of consolidated retained...Ch. 6 - How will the elimination of unrealized...
Ch. 6 - Prob. 6.14QCh. 6 - Is an inventory sale from one subsidiary to...Ch. 6 - Prob. 6.16QCh. 6 - Prob. 6.1.1ECh. 6 - Prob. 6.1.2ECh. 6 - MultipleChoice Questions on Intercompany Inventory...Ch. 6 - MultipleChoice Questions on Intercompany Inventory...Ch. 6 - Prob. 6.1.5ECh. 6 - Prob. 6.1.6ECh. 6 - Prob. 6.3.1ECh. 6 - Prob. 6.3.2ECh. 6 - Prob. 6.3.3ECh. 6 - Prob. 6.4.1ECh. 6 - Prob. 6.4.2ECh. 6 - Prob. 6.4.3ECh. 6 - Prob. 6.4.4ECh. 6 - Prob. 6.5.1ECh. 6 - Prob. 6.5.2ECh. 6 - Prob. 6.5.3E
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Which of the following is not one of the components of other comprehensive income? a. changes in revaluation surplus b. remeasurements of the net defined benefit liability (asset) unrealized gains and losses on FVPL c. translation gains and losses on foreign operation d. effective portion of gains and losses on hedging instruments on a cash flow hedgearrow_forwardWhen using the fair value method, we adjust the reported amount of the investment for changes in fair value after its acquisition. How is the change in fair value reflected in the income statement?arrow_forwardWhen there is no specified agreement in the profit-sharing, what happens to the distribution of the profits/losses? Does it will be divided equally or according to the capital contributions?arrow_forward
- Whats is the effect of increasing the asset turnover (ATO) on enterprise price-to-book value, holding all else constant? Kindly answer the above question with an introduction and conclusion based on the concept of the question. Explain the answer properly considering the accounting aspect of it.arrow_forwardis the temporary differrence of depreciation between financial accounting and taxation puposes favorable or unfavorable ?arrow_forwardHow does the fair value model differ from the revaluation model? Question 4 options: a Increases in carrying amount above a cost-based measure are recognized in equity b Changes in fair value are recognized in profit or loss c a and b d neither a or barrow_forward
- Generally, the value in use of the acquiree's net assets is more than the original equity market value because of the value of control. True or False?arrow_forwardHow do intra-entity profits present in any year affect the noncontrolling interest calculations?arrow_forwardWhich of the following represent potential gains from an acquisition? I. Increased use of debt II. Lower costs per unit produced III. Diseconomies of scale Select one: a. II and III only b. I and III only c. I and II only d. I, II, and IIIarrow_forward
- Where non-current assets are held for sale, they are required to be measured using: the equity method; the lower of carrying amounts and fair values less costs to sell; the lower of cost or market value; fair value.arrow_forwardFair Value Measurement Concept Question: What does it mean when fair value is paid to transfer a liability in an orderly transaction between market participants at the measurement date? Please explain or give an example for understanding.arrow_forward
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