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Consolidated Financial Statements

Manisha (CA & CS) (161 Points)

09 February 2011

Dear all

"Listed Companies must prepare Consolidated Financial Statements as per SEBI guidelines. For other Companies AS 21 is not mandatory. But standard itself says that when any company wants to prepare Consolidated Financial Statements, they must follow AS 21 ."

This is one post i found from the path Discussion > Accounts > Consolidated Financial Statements Contents from this site.

But can anyone tell me where is it stated that a private company which is holding company of other company is not mandatorily required to prepare the Consolidated Financial Statements.

Thanks in advance.

Regards,

Manisha

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6 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 09 February 2011

Companies act no where specifies about Consolidation of Financial Statements.

As said by you due to the SEBI guidelines the listed companies prepare CFS.

SEBI guidelines are not generally applicable to Private Limited companies and other unlisted companies so AS 21 does not apply. AS 13 has to followed for valuing investments.

1 Like

Manisha (CA & CS) (161 Points)
Replied 09 February 2011

Thank you Mr.Praveen.

I already know whatever you said. I also could find this kind of details anywhere and hence asked if anyone can quote me the exact law, act or guidance note or any other authorised source from where it can be found..

Anyway thanks.

But if someone can give me a specific answer, it will be very useful.

Regards,

Manisha

praveen (Chartered Accountant) (6971 Points)
Replied 09 February 2011

exactly thats what i am trying to say there is nothing specific stated

thanks

CA SANJAY TALWAR (Job) (222 Points)
Replied 24 February 2011

regarding AS-23

BRIGHT Ltd. Acquired 30% of East India Ltd. Shares for Rs. 2,00,000 on 01-06-09. By such an acquisition Bright can excise significant influence over East India Ltd. During the financial year ending on 31-03-09 East India earned profits Rs. 80,000 and declared a dividend of Rs. 50,000 on 12-08-2009. East India reported earnings of Rs. 3,00,000 for the financial year 31-03-2010 and declared dividend of rs. 60,000 on 12-06-2010

Calculate the carrying amount of investment in Consolidated financial statement of Bright Ltd. As on 31-03-2010

Can anyone pls solve ???? its very urgent ????

Naresh Kumar (Advocate) (24 Points)
Replied 03 December 2011

Kindly see bottom note to AS 21 at page 2 of both MCA and CA AS 21 it clearly says as follows:

"It is clarified that AS 21 is mandatory if an enterprise presents consolidated financial

statements. In other words, the accounting standard does not mandate an enterprise to

present consolidated financial statements but, if the enterprise presents consolidated

financial statements for complying with the requirements of any statute or otherwise, it

should prepare and present consolidated financial statements in accordance with AS"

1 Like

jazz albart (student) (23 Points)
Replied 19 June 2012

Some of the firms out there that provide advice on preparing parts of the annual and consolidated financial statements for publication and advise on the presentation of the financial statements to credit institutions or other recipients.

financial statements