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Your Rating: 1 2 3 4 5 "Consolidated Financial Statements Intra-Entity Asset Transactions" Please...

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Accounting

Your Rating: 1 2 3 4 5 "Consolidated Financial Statements Intra-Entity Asset Transactions" Please respond to the following: Per the textbook, no official FASB guidance exists on the assignment of income effects on non-controlling interest in the consolidation process, when either the parent transfers a depreciable asset to the subsidiary or vice versa. Suggest one (1) method of accounting for the income effects on the non-controlling interest that you consider most appropriate. Provide a rationale for your response. 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 FASBs guidance, the accountant must remove the inter-company profit from Company Ss 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.

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