Question: The adjustment for the holdback of an intercompany gain in
The adjustment for the holdback of an intercompany gain in assets requires a corresponding adjustment to a consolidated deferred tax asset. The adjustment for a gain from intercompany bond holdings requires a corresponding adjustment to a consolidated deferred tax liability. In both cases, the tax adjustment is made because of a gain. Why is the tax adjustment different? Explain.
Answer to relevant Questions“Some intercompany gains (losses) are realized for consolidation purposes subsequent to their actual recording by the affiliates, while others are recorded by the affiliates subsequent to their realization for ...If an intercompany sale of a depreciable asset has been made at a price above carrying amount, the beginning retained earnings of the seller are reduced when preparing each subsequent consolidation. Why does the amount of ...Stephanie Baker is an audit senior with the public accounting firm of Wilson & Lang. It is February Year 9, and the audit of Canadian Development Limited (CDL) for the year ended December 31, Year 8, is proceeding. Stephanie ...Shown below are selected ledger accounts from the trial balance of a parent and its subsidiary as of December 31, Year 9. Additional Information • P Company purchased its 90% interest in S Company in Year 1, on the date ...Income statements of M Cop. and K Co. for the year ended December 31, Year 6, are presented below: Additional Information • M Co. uses the equity method to account for its investment in K Co. • M Co. acquired its 80% ...
Post your question