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This query is : Resolved
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.
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
Thanks for prompt reply.
as per Your reply Financial statements of XYZ Ltd. will be Merged/Consolidated with ABC Ltd.
as per Your reply Financial statements of XYZ Ltd. will be Merged/Consolidated with ABC Ltd.
12 December 2014
i think as 23 shall be applicable and u need to follow the equity method.
12 December 2014
Only disclosures are required or consolidated financial statements will be prepared/????
12 December 2014
if they are not holding sub and if as 21 is not applicable then proportional consolidation shall be made as per as 23
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
yes u got correctly provided both the co do not have holding subsidiary relationship at any timein the fy.
12 December 2014
If at any time during the financial year holding of director & their relative of ABC Ltd. exceeds 50% then ???
12 December 2014
If at any time during the financial year holding of director & their relative of ABC Ltd. exceeds 50% then ???
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%??
12 December 2014
pls refer to deifnition of holding company under as 21 , if any of the criteria is satisfied then consolidation is required.
12 December 2014
watever doubts u asking are all given in AS 21 on conslidation of FS, so pls refer tehm
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