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Journal entryAdvancedVariant — group VG.IFRS10.000003Published

Question · Intragroup transactions and unrealised profits

Ébène SA, a subsidiary of Orme SA, sold goods to Orme. At the reporting date, goods worth 60,000 at transfer price remain in Orme's inventory. Case convention: Ébène's profit margin is 30 % of the transfer price, and the tax effect is ignored. Record the consolidation entry that eliminates the unrealised profit contained in that inventory.

Inventory remaining with Orme, at transfer price
60,000
Seller's profit margin (case convention)
30 %
Your answer
  1. Line 1

    Account Elimination of unrealised profit

  2. Line 2

    Account Inventories

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