Examlex

Solved

Past and Proposed GAAP Agree That Unrealized Intercompany Profit Should

question 31

Essay

Past and proposed GAAP agree that unrealized intercompany profit should not be included in consolidated net income or assets. Briefly explain the preferred approach of eliminating intercompany profit.


Definitions:

Marginal Cost

The expenditure associated with creating a subsequent unit of a product or service.

Subsidy

A financial contribution or support given by a government or institution to lower the price of a good or service, often intended to encourage production or consumption, reduce costs, or support industries.

Cost Schedule

A detailed listing showing the various quantities of a good or service and the associated costs of producing them.

Marginal Revenue

The increase in revenue resulting from the sale of one additional unit of a product.

Related Questions