The consolidation process required for the intra-entity transfer of depreciable assets is different from the requirements for inventory and land. Analyze the current consolidation process for intra-entity transfer of depreciable assets and suggest at least one (1) improvement to the process. Provide an example to support your recommendation.
Assume that company P (parent) uses the equity method to account for its investment in company S (subsidiary). Company P purchases inventory items from company S. According to FASBâ€™s guidance, the accountant must remove the inter-company profit from Company Sâ€™s net income. Evaluate the consolidation process for inventory transfers between the parent and subsidiary and describe the process for eliminating profit from the non-controlling interest. Determine if the process permanently eliminates the profit from the non-controlling interest or merely shifts the profit from one period to the next.
Provide support for your rationale and Provide an academic source to support your post.
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