Explain Why Gains Recognised on Sale of Assets Between Entities

question 6

Essay

Explain why gains recognised on sale of assets between entities within a group are reversed on consolidation.

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Definitions:

United Nations

An international organization founded in 1945 to promote peace, security, and cooperation among countries worldwide.

Member States

Refers to the individual states that comprise a federal union, each possessing certain powers and responsibilities as delineated by the national constitution.

Department of Defense

A federal executive department responsible for coordinating and supervising all agencies and functions of the government concerned directly with national security and the United States Armed Forces.

1947

A year notable for events such as the partition of India and Pakistan, and the beginning of the Cold War era.