I may be wrong but, my understanding is that it wouldn't matter. Since Park purchased the C/S of Tun and is equity method, this tells me that they have significant influence (20-50% ownership). So they cannot have a gain from "selling" to themself (parent-sub).

Since the parent purchased the inventory at FV, the sub booked a gain. There can be no gain in a Parent/SUB relationship. We have to write of the excess of Carring value to Fairvalue.

Dr. Cost of Good Sold    xxxx  (FV minus Carrying value)

    Cr.  Inventory        &nb sp;         &nb sp; xxxx

The debit to COGS will reduce Net Income.