Opening intragroup inventory transfers of an acquired subsidiary require that prior period profits remaining in the opening inventory be adjusted to beginning retained earnings.

Question

Quizplus · Accepted Answer

This is true because intragroup inventory transfers involve transferring inventory from one subsidiary to another within the same group. The inventory being transferred may have been acquired by the subsidiary in a prior period, and any profits from that period that are still included in the inventory must be adjusted to beginning retained earnings to properly reflect the financial position of the acquiring subsidiary.

Opening Intragroup Inventory Transfers of an Acquired Subsidiary Require That