A loss on intragroup sales of inventory will be regarded as realised by the group at the time of the sale only if the transfer price represents the net realisable value of the inventories.

According to the accounting standards (IAS 2), a loss on intragroup sales of inventory is only realised by the group at the time of the sale if the transfer price represents the net realisable value of the inventory. This means that if the transfer price is lower than the net realisable value, the loss cannot be recognised until the inventory is sold to an external customer at a lower price or written down to its net realisable value.