TAILIEUCHUNG - Lecture Advanced accounting (6th Edition): Chapter 7 - Jeter, Chaney

Chapter 7 - Elimination of unrealized gains or losses on intercompany sales of property and equipment. In this chapter, we’ll look at the other things that one affiliate might sell to another, most principally property and equipment. The same general technique that you studied in Chapter 6 is used for these intercompany sales, too – we’re going to eliminate intercompany sales and unrealized gains. | Elimination of Unrealized Gains or Losses on Intercompany Sales of Property and Equipment 1 Learning Objectives Understand the financial reporting objectives in accounting for intercompany sales of nondepreciable assets on the consolidated financial statements. State the additional financial reporting objectives in accounting for intercompany sales of depreciable assets on the consolidated financial statements. Explain when gains or losses on intercompany sales of depreciable assets should be recognized on a consolidated basis. Explain the term “realized through usage”. Describe the differences between upstream and downstream sales in determining consolidated net income and the controlling and noncontrolling interests in consolidated income. 2 Learning Objectives Compare the eliminating entries when the selling affiliate is a subsidiary (less than wholly owned) versus when the selling affiliate is the parent company. Compute the noncontrolling interest in consolidated net income when the selling affiliate is a subsidiary. Compute consolidated net income considering the effects of intercompany sales of depreciable assets. Describe the eliminating entry needed to adjust the consolidated financial statements when the purchasing affiliate sells a depreciable asset that was acquired from another affiliate. Explain the basic principles used to record or eliminate intercompany interest, rent, and service fees. 3 Intercompany Sales of Nondepreciable Property When there have been intercompany sales of nondepreciable property, workpaper entries are necessary to: Include gains or losses on the sale in consolidated net income only at the time such property is sold to parties outside the affiliated group and in an amount equal to the difference between the cost of the property to the affiliated group and the proceeds received from outsiders. Present nondepreciable property in the consolidated balance sheet at its cost to the affiliated group. 4 LO 1 Financial reporting .

• Kế toán - Kiểm toán
• Advanced accounting
• Lecture Advanced accounting
• Kế toán nâng cao
• Elimination of unrealized gains
• Intercompany sales
• Depreciable property
• Advanced financial accounting
• Financial statements
• Equity method of accounting
• Accounting valuation
• International accounting diversity
• Accounting for legal reorganizations
• Accounting for state
• Accounting for leases
• Accounting for estates
• Investment accounting
• Consolidation of financial information
• Consolidated financial statements
• Intra entity asset transactions
• Variable interest entities
• Income taxes
• Interim reporting
• Foreign currency transactions
• Foreign currency financial statements
• Exchange commission
• Partnership advantages
• Statement of liquidation