Briefly discuss why an intra-group sale of a non-current asset needs to be adjusted for within the consolidated statement of profit or loss. You should refer to (2) above as part of your answer.

On 1 July 2021, Clifton Ltd sold a van to Hastings Ltd for £15,000. The van was originally bought by Clifton Ltd for £14,000 on 1 July 2019 and had an estimated useful life of seven years. At the date of transfer, the van was deemed to have a remaining useful life of five years. Depreciation on the van has been recorded within distribution costs. Profit on the sale of the machine has been recorded within other income.

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Answer As per given situations Explanation Step by Step Step 1 iAn intragroup sale of a noncurrent asset needs to be adjusted for while preparing cons... View the full answer