Asked by Jacob Corpening on Jul 04, 2024
Verified
When is the gain on an intra-entity transfer of land recognized in consolidated net income?
Intra-Entity Transfer
The movement of goods, services, or funds between different parts of the same organization.
Consolidated Net Income
The total net income of a parent company and its subsidiaries after eliminating intercompany transactions.
Gain Recognized
The process of recording in financial statements the profit earned from the sale or exchange of an asset, reflecting an increase in economic benefits.
- Determine when the gain on an intra-entity transfer of land is recognized in consolidated net income.
Verified Answer
AM
Alfonso Morillo IIIJul 08, 2024
Final Answer :
The gain created on an intra-entity transfer of land is recognized when the asset is sold to an independent third party. Gain recognition is deferred until the date of such third-party sale.
Learning Objectives
- Determine when the gain on an intra-entity transfer of land is recognized in consolidated net income.