Question: Several years ago Revnon acquired a 30 interest in Aumet

Several years ago, Revnon acquired a 30% interest in Aumet at book value. During 2012 and 2013, intercompany sales of merchandise amounted to $120,000 and $180,000. On December 31, 2012, and December 31, 2013, one third of each year's intercompany sales remained in that year's ending inventory. Intercompany sales were made at the same rate of gross margin as sales to non-affiliates. January 1, 2012, inventories contained no unrealized intercompany profits. The following data are taken from the financial statements of the two companies for 2012 and 2013:
The tax rate for both companies is 40%.
Calculate Revnon’s share of profit or loss of Aumet for 2012 and 2013 assuming:
(a) The intercompany sales were upstream.
(b) The intercompany sales were downstream.
Provide your analysis based on IAS 28 and ASPE.

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