Consolidated Financial Statements Contents

AS 22 is compulsory only for listed companies and for others it is voluntary

My friend Sai it is AS 21, and what sai said is correct. And it is compulsory for Listed companies only because SEBI asks to do so, and AS-21 is recomendatory in nature....and not mandatory as prescribed by ICAI...

i agree with Mr Ankit.. its AS 21

Agree with above posted views.

AS-21 is only recommendatory in nature. SEBI asks listed companies to prepare CONSOLIDATED FINANCIAL STATEMENTS which are to be prepared in accordance with Standard issued by ICAI i.e. AS-21.

Listed Companies must prepare Consolidated Financial Statements as per SEBI guidelines. For other Companies AS 21 is not mandatory. But standard itself says that when any company wants to prepare Consolidated Financial Statements, they must follow AS 21 .

Originally posted by : Pavan Daga
	Do a private Limited company, holding shares more than 50% in another Limited Company, should present the Consolidated Financial Statement in its Balance Sheet??

of course, the parent company should present the consolidated financial statements from the date when the subsidiary-holding relation exists with its subsidiary , and such share of portion should be more than 50%

Section 212 of companies Act requires a holding company to attach the following photo copies to its Financial Statements 

a. balance sheet

b. profit and loss account 

c. directors report 

d. auditors report 

so it is not mandating the preparation of CFS 

hope it is clear now.

a to d above are of subsidiary co's financial statements. 

Helo evry1

A company will have to prepare CBS under following circumstances:

1. when the co. is a listed co. (then as per clause 32 of listing agreement one has to mandatorily prepare CBS)

2. voluntarily

Whatever be the compulsion or whenever the co. is preparing CBS voluntarily, it will have to follow the procedure and methods as prescribed by AS 21. Thus AS 21 doesnt mandate the consolidation but describes procedure which a co. will have to follow if it is going to prepare CBS.

Moreover, Sec 212 is just a requirement i.e. if you are having a subsidiary (Indian/Overseas) you will have to attach some documents of subsidiary co. with your annual accounts :

B/S, P/L, Auditor's Report, Board's Report. 

These must be signed by the MD/Secretary of holding co. who have signed the B/S & P/l of co..

MANNER OF ATTACHING:

1. Year end date of B/s of holding co. must coincide with B/s of subsidiary co. If this is not the case, then the gap shouldn't exceed 6 months.

          e.g. H Ltd. is having a subsidiary S Ltd. . H Ltd is preparing balance sheet ending on 31.3.10, then S Ltd 's B/s should also end on 31.3.10. If this doesn't hold good then the gap shouldn't exceed 6 months

2. Period of annual accounts of subsidiary company shouldn't be less than the period of annual accounts of holding company. If this is not the case, then Holding co. should attach B/s of 2 or more years of subsidiary so that the period of accounts are not less than period of accounts of holding co itself.

* SEC213 empowers Central Government to extend the financial year of HOLDING CO./SUBSIDIARY CO. beyond 15 months so that:

        *- B/s date of both co. coincides OR

       **- The gap shouldn't exceed 6 months

Thanks & Regards

SOURAV

I do agree with Nitin, Usha, mallela