Unlike consolidation, there is no need to adjust for all transactions between the entity and the associate or joint venture; only the transactions where profit is affected require adjustment.

Question

Quizplus · Accepted Answer

This statement is true. When accounting for an associate or joint venture, only the transactions that affect profit require adjustment, unlike in consolidation where all transactions must be adjusted regardless of whether they affect profit.

Unlike Consolidation, There Is No Need to Adjust for All