Consolidation of associates
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
20 October 2016
How to consolidate accounts if a company A holds more than 20% preference shares of company B .? No equity shares are held by company A of company B.
20 October 2016
In the above case Company A holds more than 20% of preference share capital of B Limited, Thus B is a associate of A as per Companies Act but as per AS 23 B will be treated as associate only if A has substantial influnce over B, defination of significant influnce as defined is AS 23 says that A must have power to participate in the financial and/
or operating policy decisions of the investee but not control over those policies. It is to be noted prefernce share holders does not have power to vote on company resolution. Thus by holding prefernce shares A cannot be said to have significant influence over B. Moreover AS 23 talks about only equity method thus A should not consolidate B as associate however the said Note of fact must be disclosed in financial statements.
or operating policy decisions of the investee but not control over those policies. It is to be noted prefernce share holders does not have power to vote on company resolution. Thus by holding prefernce shares A cannot be said to have significant influence over B. Moreover AS 23 talks about only equity method thus A should not consolidate B as associate however the said Note of fact must be disclosed in financial statements.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Gst registered proprietorship firm
- TDS Challan - change of FY 2025-26 to TY 2026-27
- Price inclusive or exclusive of GST while made entry in P& L Account
- AUDITOR APPOINTMENT FOR THE YEAR ENDING MARCH 27
- Minimum tax payable to file Updated return
- SALARY CAN BE CAPITALIZE
- GST ISSUE OF INPUT AND OUTPUT GST
- Change Of Karta In Case of Death
- Tax rate change regarding
- Salary from Qatar in Dollars in India
- Non filing of I T Returns
- How to Handle Active E-Invoices in GST Portal Deleted from Tally?
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Starting trading business
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
