12 December 2014
There are two companies XYZ Ltd. And ABC Ltd. Director (along with his relatives) of ABC Ltd. is holding more than 20% shares of XYZ Ltd. But he is not a director of XYZ Ltd. Also ABC Ltd. is not holding any shares of XYZ LTd.
Now the question is whether XYZ LTD. & ABC Ltd. will become Associate Companies for Consolidation of Financial Statements under the New Act.
12 December 2014
the ans is yes even they are not directors but as per as as 18 they are holding more then 20% which means they are substantial share holders and thus are associated to them as related party.
12 December 2014
You mean we have to show only investment in Associates (XYZ Ltd.) in BS of ABC Ltd.as per AS 23 and no need to make consolidated financial statements.means combined BS of ABC & XYZ Ltd.
12 December 2014
Suppose at one time during the f.y. holding was more than 50% but later it becomes more than 20 % but less than 50% .In that case what will be complete accounting treatment for the period during which it was more than 50% and when it becomes more than 20%??
CAclubindia
