Intercompany Debt Transactions and Consolidation Process | Accounting

The explored the consolidation procedures required by the intercompany transfer of inventory, land, and depreciable assets. In consolidating these transactions, all resulting gains were deferred until earned through either the use of the asset or its resale to outside parties. Deferral was necessary because these gains, although legitimately recog­nized by the individual companies, were unearned from the perspective of the [...]