EOC q30 Inter corporate Investments

[300hoursoverand]

In the calculation for ratio ( Total Asset turnover) using the consolidation method, why do we subtract the 320 value from assets?

 

[krokodilizm]

During consolidation you have to ignore the intercompany account otherwise you will be double accounting because you are already merging two companies together on a full basis.

 

[300hoursoverand]

Thanks a lot man. Initially, I didnt notice what that line item was about.