consolidate a/c

meibaker

balance sheet...........................A......................B
current assets
trade receiveable....................11,508...............5.154
receivable from B plc...............4,000...................0

current liabilities
trade payable.......................13,432.................1475
payable to A plc.....................0........................4,000

the thing i dont understand is i thought we need to deduct the inter-trading amount 4,000 in both trade receivable and payable, but the answers don't seem to bother, why??
thank you!

Steve Collings

In the consolidated financial statements you would always eliminate (the effects of) intra-group trading - including receivables/payables balances at the end of the year. This is a specific requirement in IAS 27.

Is this the full Q you have posted?

Kind regards
Steve

meibaker

hi , this is the question from december 2007 past exam
additional question didn't even mention anything about inter trading...
very confusing......