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Intercompany Inventory Transactions | Consolidations | Accounting

Companies that make up a business combination frequently retain their legal identities as separate operating centers and maintain their own record-keeping. Thus, inventory sales between these companies trigger the independent accounting systems of both parties. The seller duly records revenue, and the buyer simultaneously enters the purchase into its accounts. For internal reporting purposes, recording an inventory transfer as a [...]

By |2018-05-16T07:35:57+00:00May 16, 2018|Intercompany Transactions|Comments Off on Intercompany Inventory Transactions | Consolidations | Accounting

Intercompany Land Transfer and Consolidation Process | Accounting

Although not as prevalent as inventory transactions, intercompany sales of other assets occur occasionally. Accounting for Land Transactions: The consolidation procedures necessitated by intercompany land transfers partially parallel those for intercompany inventory. As with inventory, the sale of land creates a series of effects on the individual records of the two companies. The worksheet process must then adjust the account [...]

By |2018-05-16T07:35:57+00:00May 16, 2018|Intercompany Transactions|Comments Off on Intercompany Land Transfer and Consolidation Process | Accounting

Intercompany Transfer of Depreciable Assets | Accounting

Just as related parties can transfer land the intercompany sale of a host of other assets is pos­sible. Equipment, patents, franchises, buildings, and other long-lived assets can be involved. Accounting for these transactions resembles that demonstrated for land sales. However, the subsequent calculation of depreciation or amortization provides an added challenge in the development of consolidated statements. Deferral of Unrealized [...]

By |2018-05-16T07:35:56+00:00May 16, 2018|Intercompany Transactions|Comments Off on Intercompany Transfer of Depreciable Assets | Accounting
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