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Explain with supporting workings the adjustments needed

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The following information is relevant to the preparation of the group financial statements of Marchant, a public limited company, for the year ended 30 April 20X4:

  1. On 1 May 20X2, Marchant acquired 60% of the equity interests of Nathan, a public limited company, for cash of $80 million.
  2. On 1 May 20X3 Marchant sold inventory to Nathan at its fair value of $12 million. Marchant made a loss on the transaction of $2 million and Nathan still holds $8 million in inventory at the year end.

Question 1: Explain, with supporting workings, the adjustments needed to the consolidated financial statements to correctly reflect intra-group trading.

Reference no: EM132543586

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