Intercompany current accounts-holding co.

This query is : Resolved

CA Abhishek Singh (Querist)
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10 February 2011 H ltd has two subsidiaries(Directly holding 60%,& 70% respectively) A ltd & B Ltd

Balance sheet H Ltd
Liability side
Current a/c with A ltd-Rs.40000
Current a/c with B ltd-Rs.40000

Balance sheet of A Ltd
Asset Side
Current a/c with H Ltd-Rs.36000

Balance sheet of A Ltd
Asset Side
Current a/c with H ltd-Rs.44000

Adjustment:
A remittance of Rs. 4000 by B Ltd to H Ltd has not yet been adjusted in the books of H Ltd.

Question : what will be the effect in the consolidated balance sheet & what is logic for opening current account ?

Kishore Kumar Pahuja

Kishore Kumar Pahuja (Expert)
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11 February 2011 The current account has been named so by these companies to show the day to day transactions between holding company and subsidiary companies.While consolidating the accounts of these companies the effect will be given to all the balances of current accounts including the remittance in transit from B Ltd. to H Ltd.

Any further assistance pls do contact on kishore@kkpahuja.com

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