Which of the following statements is true regarding an intra-entity transfer of land? A loss is...

Which of the following statements is true regarding an intra-entity transfer of land?

A loss is always recognized but a gain is deferred in a consolidated income statement.

Recognition of a gain or loss is deferred by adjusting stockholders' equity through comprehensive income.

loss and a gain are always recognized in a consolidated income statement.

A loss and a gain are deferred until the land is sold to an outside party.

Solutions

Expert Solution

option : D

As per accounting standards and principles the gain or loss created by intra entity land transfers is unrealised until the land is not sold to an outside party at the end of the transfer year.

therefore the profit or loss arising on sale of land is deferred until it is sold to an outside party.

ekkarill92 answered 1 year ago

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