at least 4 to 6 sentences

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Assume that company P (parent) uses the equity method to account for its investment in company S (subsidiary). Company P purchases inventory items from company S. According to FASB’s guidance, the accountant must remove the inter-company profit from Company S’s net income. Determine if the process permanently eliminates the profit from the non-controlling interest or merely shifts the profit from one period to the next. Provide support for your rationale.
Jul 28th, 2015

Thank you for the opportunity to help you with your question!

this is done by inflating  the cost of goods sold as technique to eradicate unverified profits from the buyers closing stock .In that the value of the unverified inter company profits from the closing stock are removed. this will make the returns to be pushed to the following financial period as the opening inventory .

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 28th, 2015

Determine if the process permanently eliminates the profit from the non-controlling interest or merely shifts the profit from one period to the next. Provide support for your rationale.

Jul 28th, 2015

The process does shifts the profits to the next fiancinal period.

Jul 28th, 2015

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Jul 28th, 2015
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Jul 28th, 2015
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