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hello and welcome to the session in which we will discuss inter-company inventory sale what is this topic well inter-company inventory sale is when we have a parent company and a subsidiary now the parent company might sell inventory to the subsidiary or the subsidiary might sell inventory to the parent company as long as this transaction is within the parent and the subsidiaries subsidiary parameters what does that mean it means as long as the inventory is not sold to an outsider for example the parent company did not sell this inventory to a third party or the subsidiary did not sell this inventory to a third party outside this box what happened actually is there was a transfer of inventory in inside the company why because the parent and the subsidiaries are consolidating so when they sell to each other and no sale is conducted is is no inventory is sold to a third party then its merely transfer of inventory between the two as a result we dont recognize any profit now if the inven
