Define an upstream transaction and provide an example.

Unit 5 Discussion Part 2 Advance Accounting

Topic #2: Upstream vs. Downstream Transactions

Topic 2: In dealing with intercompany transactions the direction matters. These directions are known as an upstream transaction or a downstream transaction. Please consider the following questions:

  • Define an upstream transaction and provide an example.
  • Define a downstream transaction and provide an example.
  • Are the transactions substantially different? Please justify the reason why each transaction is treated differently.

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