Aoc-1 -networth attributable to shareholding

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CS Mitesh Mehta (Querist)
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17 April 2018 Dear Experts,

Kindly provide formula for calculating Networth attributable to Shareholding as per Latest Audited Balance Sheet in AOC-1

e.g. V Pvt Ltd is associate of F Pvt Ltd only by virtue of shareholding say 22.90% is held by F Pvt Ltd in V Pvt Ltd.

While preparing AOC-1 by F Pvt Ltd, how to calculate networth attributable to Shareholding

Thanks in advance

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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06 July 2024 When preparing AOC-1 (Statement of Associate Companies) as per the Companies Act in India, the net worth attributable to shareholding in an associate company is typically calculated based on the percentage of shareholding held by the reporting company (F Pvt Ltd, in your case). Here’s how you can calculate it:

### Formula for Calculating Net Worth Attributable to Shareholding:

1. **Step 1: Obtain the Associate Company's Net Worth**
- Refer to the latest audited balance sheet of the associate company (V Pvt Ltd).
- Locate the total net worth (equity) figure as reported in V Pvt Ltd's balance sheet.

2. **Step 2: Calculate Net Worth Attributable to Shareholding**
- Multiply the total net worth of the associate company (V Pvt Ltd) by the percentage of shareholding held by F Pvt Ltd.
- Use the following formula:

\[
\text{Net Worth attributable to Shareholding} = \text{Total Net Worth of V Pvt Ltd} \times \left( \frac{\text{Shareholding percentage held by F Pvt Ltd}}{100} \right)
\]

Where:
- **Total Net Worth of V Pvt Ltd**: This is the total equity or net worth figure from V Pvt Ltd's latest audited balance sheet.
- **Shareholding percentage held by F Pvt Ltd**: This is the percentage of shares held by F Pvt Ltd in V Pvt Ltd.

### Example Calculation:

If:
- Total Net Worth of V Pvt Ltd = Rs. 1,00,00,000
- Shareholding percentage held by F Pvt Ltd = 22.90%

Then:
\[ \text{Net Worth attributable to Shareholding} = 1,00,00,000 \times \left( \frac{22.90}{100} \right) \]
\[ \text{Net Worth attributable to Shareholding} = 1,00,00,000 \times 0.229 \]
\[ \text{Net Worth attributable to Shareholding} = Rs. 22,90,000 \]

### Additional Considerations:

- Ensure that the net worth figure used is from the same financial year as the reporting company's (F Pvt Ltd's) balance sheet for alignment with reporting requirements.
- The calculated net worth attributable to shareholding is reported in AOC-1 along with other details of the associate company as per the Companies Act.

By following this formula, F Pvt Ltd can accurately report the net worth attributable to its shareholding in V Pvt Ltd in the AOC-1 statement. For precise compliance and reporting requirements, it’s advisable to consult with a qualified chartered accountant or legal advisor familiar with Indian company law and accounting standards.

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