Consolidation as per AS 21.. Plz Reply

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CA. Ashish Taparia (Querist)
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04 December 2010 Situation: Company A directly holds 47% in company B and 60 % in Company C.

Company C holds 4% in Company B.

Question- Is A required to consolidate B in its books as per AS 21.

( that is, Does A directly (47%) and indirectly holds more than 50 % of the nomimnal value of equity of B. That is will the holding be 47%+4%= 51% OR, will it be 47%+ (60% of 4%= 2.40%) = 49.40%)

(assume it is purely based on shareholding and no control over the Board of Directors is evidenced)

Please reply

CA Dhiraj Ramchandani

CA Dhiraj Ramchandani (Expert)
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04 December 2010 I think i'v already replied to this query earlier as well... Nywz, it will b considered as pure subsidiary with 51% holding....

CA Sanat Pyne

CA Sanat Pyne (Expert)
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04 December 2010 Yes, Consolidation is required as per AS21.
The period of holding wil be calculated as following
A directly (47%) and indirectly holds more than 50 % of the nomimnal value of equity of B. That is will the holding be 47%+4%= 51%

CA. Ashish Taparia

CA. Ashish Taparia (Querist)
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04 December 2010 Thanks Dhiraj. But some of the fellow CA's were of opposite view. Hence asking again

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