Impact of upstream and downstream transfers
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What is the impact on consolidated financial statements of upstream and downstream transfers?
a. No difference exists in consolidated financial statements between upstream and downstream
transfers.
b. Downstream transfers affect the computation of the noncontrolling interest's share of the
subsidiary's income but upstream transfers do not.
c. Upstream transfers affect the computation of the noncontrolling interest's share of the
subsidiary's income but downstream transfers do not.
d. Downstream transfers can be ignored since they are made by the parent company.
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The solution explains about transfers and eliminates all but one answer.
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If we agree that downstream transfers are sales by the parent to the sub, and upstream transfers are sales from the sub to the parent, then there could be a ...
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