account of holding company
Isha Nisha Johar (63 Points)
19 March 2018Isha Nisha Johar (63 Points)
19 March 2018
satish
(teaching)
(2046 Points)
Replied 19 March 2018
while preparation of consolidated financial statements, instead of investment in subsidiary company shares- holding company incorporate the subsidiary company assets and liabilities.
financial statement of subsidiary company
Equity and Liabilities | Amount | Assets | Amount |
Equity share capital | 500 | Assets | 1000 |
Liabilites | 500 | ||
1000 | 1000 |
if holding company invested 80% of shares in subsidiary company for Rs.400/-
net asset in subsidiary company is 500.
i.e. 80% of share is relevant to holding company and balance 20% shares is outers. (minority share holders)
Holding company balance sheet - before consolidation
Equity and Liabilities | Amount | Assets | Amount |
Investments in subsidiary co | |||
(80% shares) | 400 | ||
400 |
Consolidated financial statements - after consolidation
Equity and Liabilities | Amount | Assets | Amount |
Minority share | 100 | Assets | 1000 |
Liabilites | 500 | ||
600 | 1000 |
after consolidation - verify the difference of assets and lliabilities- i.e. investment in subsidiary company .
Divakar
(Student CA Final )
(11857 Points)
Replied 19 March 2018