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Applicability of AS - 21

Jay Chakraborty (Section Officer) (127 Points)

30 July 2009

A Central PSU (Miniratna) has one fully owned subsidiary. but it never prepares Consolidated Financial Statement with the logic that it is not listed. is that logic tenable?

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Krutesh Patel (ACA) (727 Points)
Replied 30 July 2009

Hello,

AS 21 s applicable to Level 1 enterprise if enterprise it wishes to prepare consolidated accounts. Level 1 enterprise includes) Enterprises whose equity or debt securities are listed whether in India or outside India.

ii) Enterprises, which are in the process of listing their equity or debt securities as evidenced by the board of directors’ resolution in this regard.

iii) Banks including co-operative banks.

iv) Financial Institutions

v) Enterprises carrying on insurance business.

vi) All commercial, industrial and business reporting enterprises, whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. 500 million. Turnover does not include ‘other income’.

vii) All commercial, industrial and business reporting enterprises having borrowings, including public deposits, in excess of Rs. 100 million at any time during the accounting period.

viii) Holding and subsidiary enterprises of any one of the above at any time during the accounting period.

Even if such company prefers not to prepare consolidated accounts, AS 21 is not applicable.