my points:
If there are unrealized intercompany inventory profits from the prior period that are realized in the current period, the profit should be added to consolidated net income. Then, the income would need to be assigned to the shareholders of the company that made the intercompany sale (Baker, Christensen & Cottrell, 2012).
Now, if the income was a result of a downstream sale, the income that is assigned to the controlling interest needs to be increased by the amount of the profit realized. However, if it was a result of an upstream sale, the income assigned to the controlling as well as the non-controlling interest needs to be increase at the time that the profit was realized (Baker, Christensen & Cottrell, 2012).
Yes, important to know if the sale was upstream or downstream for the reasons described above; in addition, in order to appropriately assign the consolidated net income to the correct shareholder (Baker, Christensen & Cottrell, 2012).
Question:
an example of one of your points. If the sale from the Subsidiary to the parent takes place, we will need to reflect any NCI net income and Parent net income. If the inter company inventory is sold in the same month, the sales were $100,000 and the COGS was $50,000. The 50,000 reflects the cost of the purchase material. The parent owns 80%. There was no sales to end customers in the month by the parent firm. What might be the calculation and analysis on the profit? What about the consolidation?