FORMULAS
INTERCOMPANY TRANSACTIONS
1.) Consolidated net income
Year of sale (plant asset) - First year (Inventory)
Parent net income from own operation, exclusive of dividends received from subsidairy
Impairment loss
Unrealized profit in ending inventory
Net unrealized gain/loss on sale (depreciable asset)
Unrealized gain/loss on sale (non-depreciable assets)
Parent adjusted net income
Add: Subsidiary adjusted net income
Subsidiary reported net income
+/- Amortization
Impairment loss
Unrealized profit in ending inventory
Net unrealized gain/loss on sale (depreciable asset)
Unrealized gain/loss on sale (non-depreciable assets)
Consolidated net income
Second Year (plant asset) - Second year (inventory)
Parent net income from own operation
Impairment loss
Realized profit in begining inventory
Unrealized profit in ending inventory
Realized gain/loss on sale (annual depreciation)
Parent adjusted net income
Add: Subsidiary adjusted net income
Subsidiary reported net income
+/- Amortization
Realized profit in begining inventory
xxx
(xxx)
(xxx)
(xxx)
(xxx)
xxx
xxx
(xxx)
(xxx)
(xxx)
(xxx)
(xxx)
Upstream sales
xxx
xxx
xxx
(xxx)
xxx
(xxx)
xxx
xxx
xxx
(xxx)
xxx
Downstream sales
(xxx)
xxx
xxx
xxx
xxx
(xxx)
(xxx)
(xxx)
(xxx)
(xxx)
xxx
x%
xxx
xxx
(xxx)
xxx
(xxx)
xxx
xxx
x%
xxx
xxx
(xxx)
(xxx)
(xxx)
(xxx)
Downstream sales
xxx
xxx
xxx
xxx
(xxx)
xxx
(xxx)
xxx
xxx
xxx
xxx
Downstream sales
xxx
(xxx)
(xxx)
(xxx)
(xxx)
(xxx)
xxx
%
xxx
xxx
(xxx)
xxx
(xxx)
xxx
xxx
%
xxx
xxx
xxx
(xxx)
xxx
(xxx)
(xxx)
xxx
xxx
xxx
xxx
(xxx)
(xxx)
(xxx)
(xxx)
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
(xxx)
(xxx)
(xxx)
(xxx)
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
7.) Plant and equipment on consolidated - Old cost or Cost prior to intercompany sales
8.) Accumulated Depreciation
Accumulated Depreciation - amount prior to intercompany sales (original or old value) - January 1, current
Add: Depreciation for year - computed in original depreciation (OLD)
Total
9.) Total gain on sale of plant assets when asset sold intercompany is sold to outsider.
xxx
xxx
xxx
xxx
xxx
xxx