老师请问下C错在哪里？

问题如下：

John Thronen is an analyst in the research department of an international securities firm. He is preparing a research report on Topmaker, Inc., a publicly traded company that complies with IFRS.

On 1 January 2016, Topmaker acquired a 15% equity interest with voting power in Rainer Co. for $300 million. Topmaker has representation on Rainer’s board of directors and participates in Rainer’s policymaking process. During 2016, Rainer sold $60 million in inventory to Topmaker for $80 million. In 2017, Topmaker resold the entire inventory to a third party.

Which of the following statements regarding the sale of inventory by Rainer to Topmaker is correct?

选项：

A.

The sale represents a downstream sale.

B.

Topmaker’s unrealized profits are initially deferred.

C.

Profits will decline on Topmaker’s 2016 income statement.

解释：

The inventory sale between Rainer (associate) and Topmaker (parent) is an upstream transaction. Under the equity method, the deferral process for unrealized profits is identical under upstream and downstream inventory transfers. The investor company’s (Topmaker’s) share of unrealized profits is deferred by reducing the recorded amount of equity income on the investor’s income statement. In later periods, when the inventory is sold to third parties, the deferred profits are added to equity income.