Unrealised profits on an intragroup sale of inventories arise if:
A) the sale is an upstream transaction.
B) the sale is a downstream transaction.
C) the inventories are held within the group at date of consolidation.
D) none of the above.

Question

Quizplus · Accepted Answer

Unrealized profits on an intragroup sale of inventories arise only if the inventories are held within the group at the date of consolidation. Upstream and downstream transactions do not necessarily result in unrealized profits on intragroup sales.

Unrealised Profits on an Intragroup Sale of Inventories Arise If