Table of Contents
What is the difference between the downstream and upstream sale?
Upstream and Downstream sales are normally associated with inter-company sales. Upstream is a subsidiary selling into the parent entity; while downstream sales are from parent to subsidiary. Financially, it usually refers to loans, since dividends and interest generally flow upstream.
What is upstream and downstream in consolidation?
It’s important to understand how each of these is recorded in the respective unit’s books, the impact of the transaction, and how to adjust the consolidated financials. A downstream transaction flows from the parent company to a subsidiary. An upstream transaction flows from the subsidiary to the parent entity.
What is the difference between upstream and downstream business?
As a business owner or operations manager responsible for production, understanding the supply chain is essential to the success of your business. Upstream refers to the material inputs needed for production, while downstream is the opposite end, where products get produced and distributed.
What is the difference between upstream and downstream marketing?
Upstream marketing is focused on strategy and the long-term market situation, while downstream marketing looks at tactics and supporting the company sales team. Distinguishing these types of activity can help build a bridge between marketing and sales, benefiting both.
What is the downstream transaction?
Downstream transaction: Parent company selling goods to Associate: Inventory is not in Parent company books. So, unrealized profit if there is any in unsold stock of associate. Then it should be reduced from investment value. Entry will be Dr. Unrealized profit and Cr. Investments.
How does entity a eliminate the effect of upstream transaction?
At the same time, Entity A eliminates the effect of upstream transaction with respect to its 20\% interest in consolidated financial statements. There are two approaches to this step and both are acceptable and used in practice.
What is the meaning of upstream oil companies?
Upstream companies: These are the companies which are primarily involved in exploration and production of crude oil I.e. extraction of crude oil from subsurface. Many national oil companies like ONGC, OIL,Petronas and private players like Shell, Reliance etc can be said to belong in this category .
What are upstream and downstream gains and losses under IAS 28?
IAS 28.28 requires gains and losses resulting from ‘upstream’ (sales by associate/joint-venture to investor) and ‘downstream’ (sales by investor to associate/joint-venture) transactions involving assets to be recognised only to the extent of unrelated investors’ interests.