CA Anil Agarwal (Practicing CA) (67 Points)
12 October 2011A company has 5 subsidiaries.It diluted its 100% share in a wholly owned subsidiary on 23/09/2011. now while consolidating the P&L of the diluted subsidiary will the intercompany transactions between the holding co. and diluted subsidiary will be nullified/cancelled? if yes what effect will be taken on reserve and surplus in balance sheet?
ACCOUNTANT
(Student)
(559 Points)
Replied 12 October 2011
Unrealised profits will be adjusted to the group reserves i.e., eliminated from it...in the balance sheet...
CA Anil Agarwal
(Practicing CA)
(67 Points)
Replied 12 October 2011
what about purchase-sale transactions with the diluted subsidiary..
will they be elliminated?
ACCOUNTANT
(Student)
(559 Points)
Replied 12 October 2011
I reckon it should be eliminated but im not sure...wait for others to reply..
CAclubindia
