Consolidation of accounts
Querist : Anonymous
A query regarding consolidation of accounts.
If the holding company has provided 100% provision for investment in subsidiary but in the books of subsidiary company, it has not provided for any losses, i.e; its share capital is still continuing. On consolidation of their accounts, how do we eliminate the investment against share capital.
Kindly advice.
Eliminate the investment and provision in holding books and share capital & p&l debit (loss) balance in subsidiary books
Querist : Anonymous
Can you further elaborate on the same with an example.
Capital Rs.100 under liability & accumulated loss Rs.100 under assets
In Holding company Investment is subsidiary Rs.100 under assets and Provision for Investment Rs.100 under liability so you can eliminate as follows
Share capital in Subsidiary Rs.100 & Investment in shares in holding Rs.100
Accumulated Loss balance Rs.100 in Subsidiary and Provision for Investment Rs.100 in Holding company
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