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Elimination of profit on inter co Fixed Asset sale

What are the elimination transactions on consolidation for a fixed asset sold through intercompany

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The asset was sold at a profit from one company to another through intercompany, and I would like to check the transactions involved for elimination. The subsidary is new so the selling subsidary recognised the profit in 2019 but the first accounts for the purchasing company and for consolidation of the group (The Selling company owns the purchasing company) will be in 2020.

Would the elimination transactions be as follows for consolidated accounts:

DR - Profit and Loss a/c Profit on disposal  and CR - Fixed Asset Cost account

DR - Accumulated Depreciation for the additional depn and CR - P&L Depreciation account for the additional depreciation

Many thanks

 

 

 

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By johngroganjga
24th Nov 2020 08:44

You just show the asset in the consolidated balance sheet at the same cost and NBV as it would have had in the selling company if it had not been sold. The accounting entries just follow that.

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