2024 CFA Level I Exam: CFA Discussion Topic: CFA Level II

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Topic: CFA Level II - Investment in Associates Question

Author	Topic: CFA Level II - Investment in Associates Question
vikram123 @2015-01-04 09:26:04	I have a simple question (Examples 5 & 6, page 29, Volume 2): For Upstream or Downstream sales, why is the % ownership not always 100% when adjusting profits? After all, there are only single upstream or downstream suiter given in the examples? In exaple 5, Foxworth had NI of 20,000, out of which 8,000 was due to upstream sale to Wicker. So why are we deducting only 8,000*0.25 out of the Wicker's share of Foxworth's NI when Wicker was responsible for the entire 8,000? Thanks.

Author

Topic: CFA Level II - Investment in Associates Question

vikram123
@2015-01-04 09:26:04

I have a simple question (Examples 5 & 6, page 29, Volume 2):

For Upstream or Downstream sales, why is the % ownership not always 100% when adjusting profits? After all, there are only single upstream or downstream suiter given in the examples?

In exaple 5, Foxworth had NI of 20,000, out of which 8,000 was due to upstream sale to Wicker. So why are we deducting only 8,000*0.25 out of the Wicker's share of Foxworth's NI when Wicker was responsible for the entire 8,000?

Thanks.

CFA Discussion Topic: CFA Level II - Investment in Associates Question

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CFA Discussion Topic: CFA Level II - Investment in Associates Question

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