Unrealized profits or losses on plant assets affect the financial statements until the assets are sold outside the consolidated entity.

Question

Quizplus · Accepted Answer

Unrealized profits or losses on plant assets can have an impact on the financial statements of the consolidated entity until the assets are sold to an external party. This is because the consolidated entity may need to adjust the carrying value of the assets on its books based on changes in the fair value or market value of the assets, which can result in unrealized gains or losses. However, once the assets are sold outside the consolidated entity, any realized gains or losses are recorded on the income statement and the assets are removed from the books.

Unrealized Profits or Losses on Plant Assets Affect the Financial