PURP adjustments - DFS?
fairycake
Registered Posts: 14 New contributor 🐸
Hi Everyone,
Does anyone know if knowledge of PURP inventory adjustments is required for DFS? A question on PURP has cropped up in a “mock” DFS paper issued by my college (Kaplan) which surprised me a bit as it has never been taught in class and I can't find any reference to it in my textbook.
Nice of them!
Do I need to add this to my very long list of things to crack before the exam? ;-)
Does anyone know if knowledge of PURP inventory adjustments is required for DFS? A question on PURP has cropped up in a “mock” DFS paper issued by my college (Kaplan) which surprised me a bit as it has never been taught in class and I can't find any reference to it in my textbook.
Nice of them!
Do I need to add this to my very long list of things to crack before the exam? ;-)
0
Comments
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Hi Everyone,
Does anyone know if knowledge of PURP inventory adjustments is required for DFS? A question on PURP has cropped up in a “mock” DFS paper issued by my college (Kaplan) which surprised me a bit as it has never been taught in class and I can't find any reference to it in my textbook.
Nice of them!
Do I need to add this to my very long list of things to crack before the exam? ;-)
What the bugger is a PURP????0 -
well ive wanted to say excuse you for the last hour
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Is it something to do with the unrealised profit in the consolidated statements?0
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lol you are strange! :P
how do you manage to spend your whole lif on here?
I dont!!! I've only recently started to spend more time on as the revision games are beneficial for my exams......... Or so I tell myself.
I always post when I come on too, I bet loads of people come on and dont post. So techincally I look like i'm a forum addict but i'm not!!
DENIAL!!!!0 -
I dont!!! I've only recently started to spend more time on as the revision games are beneficial for my exams......... Or so I tell myself.
I always post when I come on too, I bet loads of people come on and dont post. So techincally I look like i'm a forum addict but i'm not!!
DENIAL!!!!
denial is a river in egypt !!!!0 -
I dont!!! I've only recently started to spend more time on as the revision games are beneficial for my exams......... Or so I tell myself.
I always post when I come on too, I bet loads of people come on and dont post. So techincally I look like i'm a forum addict but i'm not!!
DENIAL!!!!
lol ok. i tell myself they are helpful too, even though i want to go to bed. i have to admit i dont sign in at work i just check the activity. leave it until the evenings. or tomorow as i am off!!! yay! for revision, boo!!0 -
well i can give up anytime i want i just cant right now0
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oh, well you need to know how to adjust the intercompany sales within the consolidated accounts (both Statement of Financial Position and the Income Statement), so you need to know how to adjust for the unrealised profit, but I got no clue what PURP is...
Unrealised profits are basically goods sold from one company to another, which have not been sold to third parties yet, but I guess you know that already.
The adjustment in the books is, if I am not mistaken:
Easier with an example, so if company A owns company B and they sell stock with a value of 500 to company B for 1,000.
If company B then only sells 50% of the goods before the SoFP date, the other 50% need to be cancelled out.
Company A bought the goods for 500, so that's the bit you want to keep in the intercompany accounts. You remove the 1000 from their sales. You then remove the 1000 from the purchases from company B.
Company B now has a stock value for the goods they haven't sold of 500. As the costs were only 250, you need to adjust the closing stock figure with 250 as well.
Now I really am crap at explaining this, so I hope I got it right and otherwise someone comes along and explain this better. I'm also not sure if this is what you are after or not...
I got this on the planning for studying in more details tomorrow, so maybe tomorrow I can correct myself if I am wrong
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Rinkske I think you know everything!! How do you fit it all in and not forget it? Your a genious!!!0
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I am definitely not a genius! I don't know how it all fits, but I think after the exam I'll forget all about it.
Also it does help that my day job is so boring, I could do it in my sleep, so it does take energy, but it's mainly mindless (Hopefully that changes when I'm done with my AAT, but let's wait and see...), so for now I try to remember/ understand it all, so I can prove in my workplace I can do more than just my current job....0 -
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I am definitely not a genius! I don't know how it all fits, but I think after the exam I'll forget all about it.
Also it does help that my day job is so boring, I could do it in my sleep, so it does take energy, but it's mainly mindless (Hopefully that changes when I'm done with my AAT, but let's wait and see...), so for now I try to remember/ understand it all, so I can prove in my workplace I can do more than just my current job....
lol you can't get more boring than the intrastat i was doing earlier0 -
Oh that sounds horrible....thats true it could be two weeks before the exam i finally get a confirmation letter from the college and no venue given on it and i know its not at the college aggggghhhhh i give up
Can't you look it up on the MyAAT my exam details section or do they not give the proper address there either?0 -
Hi Rinske, thanks for your message.
I knew we had to remove i/c sales and purchases, but as for unrealised profits... this is the first I've heard of these! I gather PURP = provision for unrealised profits.
Your explanation is good, it makes sense to adjust the closing stock down now I think of it.
Thanks for your help!0
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