If only T1 and T2 are completed during the current period, and the gain reported by the parent company is seen as unrealized from a consolidation viewpoint, it tells one that the gain is eliminated in the consolidation process.
What is the consolidation about?
When fitting consolidated financial affidavits, any intercompany undertakings or profits are typically eliminated to prevent double counting and to reflect the business-related substance of the overall group.
In summary, the gain reported apiece parent guest in this scenario is thought-out unrealized from a consolidation posture, and any miscalculation of the land by the subsidiary endure be adjusted when preparing combined financial assertions.
See text below
Land is first purchased by the parent company from an unrelated party (T1), then sold to a subsidiary of the parent company at a gain (T2), and finally sold for a profit by the subsidiary to an unrelated party (T3): Case C: Only T1 and T2 are completed during the current period. The gain reported by the parent company is considered unrealized from a consolidation viewpoint. The land is overvalued by the subsidiary and should be reported at its cost to the consolidated entity.