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Accounting 471/875

Accounting 471/875. Chapter 5. Intercompany Asset Transfers. upstream transfers transfers of land from subsidiary to parent transfers of depreciable assets from subsidiary to parent downstream transfers transfers of land from parent to subsidiary

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Accounting 471/875

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  1. Accounting 471/875 Chapter 5

  2. Intercompany Asset Transfers • upstream transfers • transfers of land from subsidiary to parent • transfers of depreciable assets from subsidiary to parent • downstream transfers • transfers of land from parent to subsidiary • transfers of depreciable assets from parent to subsidiary

  3. Need for Consolidation Worksheet Adjustments • Gains and losses on land and depreciable asset transfers should be deferred and excluded from both parent’s net income and consolidated net income until asset is either sold to unaffiliated party or, in case of depreciable asset, asset is used to generate revenue from unaffiliated party • when land is transferred, selling affiliate recognizes gain or loss equal to difference between amount received from buying affiliate and selling affiliate’s book value for transferred asset • when depreciable asset is transferred, recipient’s recording of expense replaces recipient’s sale as event that signals recognition of related gain or loss in consolidated net income

  4. Standard Consolidation Worksheet AdjustmentsIntercompany Land TransfersUpstream Transfers

  5. Standard Consolidation Worksheet AdjustmentsIntercompany Land TransfersDownstream Transfers

  6. Standard Consolidation Worksheet AdjustmentsIntercompany Depreciable Asset TransfersUpstream Transfers

  7. Standard Consolidation Worksheet AdjustmentsIntercompany Depreciable Asset TransfersUpstream Transfers

  8. Standard Consolidation Worksheet AdjustmentsIntercompany Depreciable Asset TransfersDownstream Transfers

  9. Standard Consolidation Worksheet AdjustmentsIntercompany Depreciable Asset TransfersDownstream Transfers

  10. Calculation of Parent’s Interest in Subsidiary Retained Earnings at Beginning of Year

  11. Calculation of Minority Interest in SubsidiaryRetained Earnings at Beginning of Year

  12. Calculation of Minority Interest in Subsidiary Net Income

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