In the Year That the Group Terminates Its Consolidation Election

question 39

Short Answer

In the year that the group terminates its consolidation election, a consolidated group's deferred gain from an intercompany asset sale between affiliates is recognized in full under the rule.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including the cost of raw materials and labor.

Credit Terms

Agreed upon conditions under which a buyer can pay at a later time for goods or services received, typically specifying the time period and any discount for early payment.

Perpetual Inventory System

An accounting method that records inventory transactions in real-time, immediately affecting the inventory account whenever an item is received or sold.

Discount Period

The time frame between the onset of a payment period and the due date when a discount for early payment is available.