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AS 21

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Bhumika Ladhani

Article

24 Points Posted on 26 April 2011

In AS 21's scope it has been mentioned that the parent company shall not include the accounts of its subsidiaries while consolidating when

1. Control is intended to be for a short-term & the subsidiary is acquired with a view to its subsequent disposal in the near future. or,

2. It operates under severe long term restrictions , which significantly impair its ability to transfer the funds to the parent.

what is the meaning of point 2? what can be such long term restriction? Please explain with example if possible...

Replies (2)

Ankit CA and CS

Manager - Accounts

205 Points Posted on 26 April 2011

Some times what happens some economy announces that profit made by any entities operating within thewre scope cannot transfer any funds outside the economy. Now Suppose an Indian Co. have subsidiary in Zimbabwe whr sch rules apply it will not consolidate such subsidiary.... Apollo Tyres Actually have such subsidiaries... it gives note in its Notes to Accounts... Refer its accounts for the same.... :)