Which of the following is true with respect to performing consolidation adjustments for intragroup borrowings and the corresponding interest?

Question

Quizplus · Accepted Answer

Intragroup borrowings and the corresponding interest create assets and liabilities as well as revenues and expenses that do not exist in terms of the group's relationship with external entities. Therefore, it is necessary to perform consolidation adjustments to eliminate these effects and present a true and fair view of the group's financial position and performance. The adjustment to the asset and liability is necessary as long as the intragroup loan is outstanding, not just in the year it is issued. A tax adjustment may be necessary, but it is not the only adjustment needed.

Which of the Following Is True with Respect to Performing