Intercompany profits or losses in inventories resulting from sales of merchandise by a partially owned subsidiary need not be considered in the computation of minority interest in net income of the subsidiary.

Question

Quizplus · Accepted Answer

Intercompany profits or losses in inventories resulting from sales of merchandise by a partially owned subsidiary must be considered and eliminated in the computation of minority interest in net income of the subsidiary to ensure that the consolidated financial statements reflect only the profits or losses realized through transactions with external parties.

Intercompany Profits or Losses in Inventories Resulting from Sales of Merchandise