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Consolidation - Subsidary's Subsidary

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shashank (Querist)
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06 April 2011 Hello friends,

My doubt is

"How should the consolidation of a Holding company and a subsidary' subsidary be done? Should it be first be consolidated with the subsidary or can both subsidary co. and its subsidary together be consolidated with the holding comp ?"

Eg: x - holding comp
y - subsidary of x
z - subsidary of y.

Should the accounts of y and z be consolidated first and then consolidated with x, or can all the three x, y and z be consolidated together ? What is the treatment as per AS 21 ?

Mandar

Mandar (Expert)
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18 April 2011 Consolidate Z with Y first
Then consolidate all with X

shashank

shashank (Querist)
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09 May 2011 Thanks for the reply Mr.Mandar. But why can't it be done the other way ? why can't 'y' and 'z' be consolidated together with 'x'?
Is there any Accounting standard which prohibits us from doing so ?

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