Group SPL - Unrealised profits -Example 3 - ACCA Financial Reporting (FR)

[@saikrishna8022]

Hello Mr. Chris Barlow. Thank you for your valuable lectures. For all P level papers, I went through all lecture available in open tuition website and did some self study myself. I am an ACCA Member now :) Thank you once again and I am grateful for this You tube channel forever. Love from India :)

[@muhammadbaqrain6609]

Great teacher. love your style. love all the way from Pakistan.

[@lilyarman]

Hi Chris, you had Master of Engineering (MEng), Aeronautical Engineering In Imperial College, London. Without a degree in Accounting how did you end up in teaching Accounting students with your signature footprint. Inspiration for those who always have excuses.

[@opentuition]

Chris does not monitor posts here. If you want him to answer then ask in the free Ask the Tutor Forum on our website :-) (He is, obviously, a qualified accountant as are all of our tutors :-) )

[@Superjen999]

Hello, I would like to ask for PUP, at 7.23 mins , why we do 25/125 where 125 comes from?

[@oluwaladeorimi]

You're converting the markup on cost to margin because margin is to sales as mark up is to cost

[@AmNonExistant]

I understand that intra group sales must be eliminated from the group SPL. But how is it we deduct the same amount from the ‘revenue’ figure and the ‘C.O.S’ figure? Suppose Company S bought goods at cost $4000 and sold them to Company P at $5000. Company S records C.O.S of $4000 and Sales of $5000. How is it then that when it comes to preparing the Group SPL, we deduct $5000 from Sales and from the C.O.S? There’s only $4000 in the C.O.S. So how can we deduct $5000?

[@fajarp6277]

True, but, if S sold goods worth 5k, S will record a revenue of 5k. Since P bought it for 5k, they will record a purchase of 5k in their Cos. While consolidating, these two will be eliminated.

[@AmNonExistant]

@@fajarp6277 ohhh gotcha, missed that part Thank you so much for answering!!😁

[@RajaAhsan-u9m]

Why PUP is debited in the cost of sales? Whats the logic behind? I am struggling to understand this

[@pigslefats]

Because "too much" was transferred out of P's COS to P's inventory in the first place-so dr COS to reduce the initial amount transferred (which was a credit to COS)