Consolidation of financial statements

For consolidation at entity A level, consolidated accounts of entity B shall be used.

Further, in case of associates, equity method is applicable not line by line consolidation.

Further, if an entity has only associate and no subsidiary, then consolidation is not required.

Thanks

Thanks sir for your reply!!

But as per theprovisions of section 129(3) of the CA 2013 and consolidation as per AS 23, FS of associate Company have to be consolidated with Holding Companies according to equity method. Can you please share any notification/circular in this regard??

Regards

Ravi Gupta

Right...AS 21 and AS 23 sets the guidelines for method of consolidation. As suggested by the name of AS 23 itself - "Accounting for Investments in Associates in Consolidated Financial Statements", it says an associate shall be consolidated in "consolidated financials statements (CFS). It means the company should be preparing the CFS shall consolidate Associate also as per equity method. Practically, we do the consolidation if and only if a company has at least one subsidiary.

Hope this clarifies.

Thanks