FAC3762 - Joint Operations

STEPS:

1 INTER COMPANY TRANSACTIONS
2
3
4
5
6
7

, 1. INTER COMPANY TRANSACTIONS

Adjustment for inter-company loans
DT CT
I1 Payable (SFP)
Receivable (SFP)

I2 Interest income (PL)
Interest expense (PL)

Adjustment for inter-company income/expenses

I3 Income (PL)
Expense (PL)

Adjustment for inter-company sales

I4 Reveue (PL)
Cost of sales (PL)

Adjustment for unrealised profit in inventory
From acquisition to BOY
I5 Retained earnings (SCE)
Inventories (SFP)

I6 Deferred tax (SFP)
Retained earnings (SCE)

For the current year
I7 Inventories (SFP)
Cost of sales (PL)

I8 Income tax expense (PL)
Deferred tax (SFP)

I9 Cost of sales (PL)
Inventory (SFP)

I10 Deferred tax (SFP)
Income tax expense (PL)

Adjustments for inter-company sales PPE
Eliminate the unrealised profit
Sale took place CY