Question

Northridge Corporation has several consolidation subsidiaries. You have been asked to research the professional literature to determine how intra-entity transactions are treated for financial reporting purposes. Place the citation for the excerpt from the FASB ASC that provides this information.

ASC – ( ) – ( ) – ( ) – ( )

Answer 1

The Excerpt that provides this information is

810-10-45-1

" In the preparation of consolidated financial statements, intra-entity balances and transactions shall be eliminated. This includes intra-entity open account balances, security holdings, sales and purchases, interest, dividends, and so forth. As consolidated financial statements are based on the assumption that they represent the financial position and operating results of a single economic entity, such statements shall not include gain or loss on transactions among the entities in the consolidated group. Accordingly, any intra-entity profit or loss on assets remaining within the consolidated group shall be eliminated; the concept usually applied for this purpose is gross profit or loss (see also paragraph (810-10-45-8) "