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Consolidated Financial statements

This query is : Resolved 
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(Querist)
26 November 2009 Dear Sir,
Consider the following example:
H Ltd is holding company of A,B,C & D Ltd.
A & B Ltd having a Goodwill of Rs. 10,000 each in their balance sheet (before holding - Subsidiary Relationship exist)
While preparing a CFS for H Ltd. a capital Reserve Arising out of above four subsidiaries say Rs. 135000/-
Query:
1. Whether Capital Reserve arising on CFS can be netted off against Goodwill in A & B Ltd and Shown as a capital Reserve in CFS of H Ltd as Rs. 115000 (135000-20000)?
2. If yes, whether it amounts to Impairement of Goodwill, since the Goodwill was not arising on Consolidation?
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CA Ravi Sisodia

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CA Ravi Sisodia (Expert)
26 November 2009 yes it is BEST Accounting practice. This treatement is not amounts to Impairement of Goodwill, its only set off against capital reserve. goodwill is not eligible for Impairement.
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