AASB 10 Consolidated Financial Statements: state the requirement for the full adjustment for the effects of intragroup transactions.

A. Explain the need for making adjustments for intragroup transactions and describe a key point to remember in relation to the consolidated financial statements in your own words (hint: There are 5 important key points in relation to the consolidation financial statements).

B. Explain why income tax effects arise from intragroup transactions in a consolidation group and what situation must exist before the tax effects can be realised.

C. Explain how the unrealised profit on an intragroup transaction becomes realised profit. You may refer to examples in your textbook to assist you.