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Consolidation

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Yash Mulani

22 Points Posted on 03 November 2020

Can I consolidate with indirect associate? Eg: X is a wholly owned subsidiary of Y. X has an investment of more than 20% in Z. Can Y consolidate Z's profit? Or Y has to prepare a separate consolidated financial statement

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Quick Summary

This discussion delves into the complexities of consolidating with an indirect associate. It questions whether a parent company (Y) can consolidate the profits of a company (Z) in which its wholly-owned subsidiary (X) holds a significant investment (over 20%). The consensus points towards valuing the associate (Z) using the equity method as per Ind AS 28, implying that the parent (Y) would not typically prepare a separate consolidated financial statement for Z, and the subsidiary (X) would not need to prepare separate consolidation statements for Z.