Flatt Ltd Is a Wholly-Owned Subsidiary of Franco Ltd

Flatt Ltd. is a wholly-owned subsidiary of Franco Ltd. For consolidation purposes, how does the treatment of unrealized profits on upstream sales differ from the treatment of unrealized profits on downstream sales?

A) Unrealized profits must be eliminated on upstream sales, but not on downstream sales.
B) Unrealized profits must be eliminated on downstream sales, but not on upstream sales.
C) Unrealized profits must be eliminated for both upstream and downstream sales.
D) Unrealized profits are not eliminated on either upstream or downstream sales.