Elimnination of Investment Income/Expense
I have requirement to eliminiate intercompany investment against expenses.
Company X has investment in company Y for 90% of stocks.
Company Y distributes dividend income ( $1000)and Company X share is 90%($900)
Company X accounts for investment income , but pays a tax of 30%. Hence accounts for investment income as $630, tax is $270.
How will this work in elimination where X will report income of $630 and Y will report the amount to be eliminated as $900.