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
- Taxable or Tax exempt
- CAPITAL GAIN BASE ON NOTIFICATION
- Form 140 tds
- TDS Deducted AY-2013-14 Not Reflected in 26as
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- ADVANCE PAYMENT OF ADVOCATE
- Demand Outstanding AY 2013-14 TDS Deducted not shown in 26as
- NRI starting business in India
- DIN reactivation
- GST not cancelled by tenant
- 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
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
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
