Class notes
FRK300
- Course
- FRK300 (FRK300)
- Institution
- University Of Pretoria (UP)
Lecture notes of 8 pages for the course FRK300 at UP (NOTES)
[Show more]
Seller
FollowContent preview
lOMoARcPSD|8949379Group statements Chapter 6 Notes
Financial accounting 300 (University of Pretoria)
StuDocu is not sponsored or endorsed by any college or university
Downloaded by Lexi Claasen (lexi.claasen13@gmail.com)
, lOMoARcPSD|8949379
Group statements Chapter 6
Intragroup PPE: Basic principles
If there are intragroup sales of PPE for a profit within the group
c Unrealised profit eliminated in full upon consolidation (IFRS 10.B86(c))
Non-depreciable PPE
Consolidation journal:
Dr Profit on sale of PPE (P/L) (â profit)
Cr PPE: cost (SFP) (â CP)
When will unrealised profit realise?
c When PPE sold to a 3rd party
c Therefore, unrealised profit is eliminated every year upon consolidation until sold to
a 3rd party
o Deferred tax implications
In the consolidated FS, unrealised profits are eliminated/realised
c Consolidated profit before tax changes
c Therefore, consolidated income tax expense must also be adjusted
Non-depreciable PPE:
Eliminate unrealised profit fully in year of the intragroup sale decrease profit for the
group decrease income tax expense for the group
Consolidation journal:
Dr Deferred tax (SFP)
Cr Income tax expense (P/L)
*we are deferring the tax until the profit realises
o Sale to 3 rd party in same reporting period
c Adding the TBs of P and S has the effect that both “profit on sale of PPE” and
“property, plant and equipment” are shown at the correct amount
c No consolidation journals are thus required
o Sale to 3 rd party in different reporting periods
Downloaded by Lexi Claasen (lexi.claasen13@gmail.com)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller lexiclaasen. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R133,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75057 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now