Consolidated financial statements

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Bharat (Querist)

27 December 2016 For the purpose of consolidation of a holding co. (say A Ltd.) with an associate Co. (Say B Ltd.) , whether Standalone financial statements of B Ltd. should be taken or CFS of B Ltd. ; where B Ltd. has susidiaries (Say C Ltd. & D Ltd.).Please give reasons for your answers.

CA Anuj Agrawal

CA Anuj Agrawal (Expert)

27 December 2016 First one needs to understand the difference between consolidated FS and separate FS. There is no concept to provide standalone FS/ separate FS for an entity unless it is required by law or entity elects so. Now, when we talk about CFS then it will cover all all subisdiaries, JV & associates etc and all will have accounting as per relevant other accounting standards.

All sub's will be consolidated line by line and JV & associates will be shown using EQUITY Accounting method. Now, coming to your question whether it should be separate FS or CFS of that associates to be used while doing consolidation so one should again go by the same logic which talks about that there is no concept of standalone FS in IND AS unless some exceptions excercises , hence all FS of subisdiaries/ JV/ Associates will be their CFS and not stand alone FS unless materiality has been used...thanks

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