Consodidated balance sheet

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Navin (Querist)
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31 August 2011 can anybody help me out, please prodive me with the treatment of bonus, preference shares dividend and proposed dividend, its urgent please....

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
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05 October 2011 Assuming the bonus as Bonus shares,
if the bonus shares are issued by the subsidiary company then the effect of the same to be given by reducing the general reserve of the company and increasing the share capital.

Also increase the amount of share capital used for calculating the goodwill / Capital Reserve.

If teh Bonus share are issued by Holding Company, the adjustment of reserves and share capital is required to be done

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
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05 October 2011 Preference Dividend declared by Subsidiary

Preference shares hold by Holding Company- if preference dividend declared by subsidiary company will form part of profit and loss of holding company
the reamianing share is to be shown as minority interest

Preference Shares not hold by Holding - whole preference share dividend to be form part of minority share

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
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05 October 2011 Preference dividend declared by holding company -

the entry for provision of preference dividend to be passed in the books of holding company and similarly the laibilty to be provided in balance sheet for outstanding preference share dividend and also the profits to be adjusted accordingly

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
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05 October 2011 Proposed Dividend - For acounting treatment of Proposed dividend, you are reqd to have necessary knowledge of AS- 9

AS-9 says that the proposed dividend is reqd to be recognised as income only when the same is declared by the other company.

So, proposed dividend is taken in the books of proposed dividend when the same is declared by the subsidiary company

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
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05 October 2011 When the Proposed dividend is declared by the Subsidiary company.

Please first check whether the propsed dividend is provided out of previous years profit or from post period profit

From Pre acquisition period - In such case the amount of proportion of holding company's share belonging to pre acquisition perid is to be deducted from the Cost of Investment/Holding while calculating Goodwill / Capital Reserve

From Post Acuisition period - The proportionate amount of holding company is to be transferred to Profit & Loss A/c of Holding Company

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
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05 October 2011 If the Proposed DIvidend declared by the Holding Company

Same treatment as for Preference Dividend declared by theHolding Company as mentioned above

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