Intercompany transaction in Acquisition (Combination) method

Is Intercompany transaction totally removed in Acquisition (Combination) method ? I refer to CFA reading page 49

The consolidated income statement for GlaxoSmithKline is presented in Exhibit 9. IFRS and US GAAP have similar formats for consolidated income statements. Each line item (e.g., turnover [sales], cost of sales, etc.) includes 100% of the parent and the subsidiary transactions after eliminating any upstream (subsidiary sells to parent) or downstream (parent sells to subsidiary) intercompany transactions. The portion of income accruing to non-controlling shareholders is presented as a separate line item on the consolidated income statement. Note that net income would be the same under IFRS and US GAAP.30 The analyst will need to make adjustments for any analysis comparing specific line items that might differ between IFRS and US GAAP.


Yes totally removed

Yes it is removed. The CFAI online practice questions have one question related to this under FRA.