Consolidation of financials

Consolidation of Associate company is required only if Holding company is preparing consolidated financial statements.

Consolidation is mandatory for any registered company. The accounting requires that if an entity does not have a subsidiary, it is required to present its stand-alone financial statements as consolidated financial statements. Since the above company has an associate, the share of profits in the associate are required to be shown in income statement. The investment made in the associate and the respective share of profits are required to be presented as investment made in associate in the balance sheet in consolidated financial statements.

In stand-alone financial statements, investment in associate needs to be shown at fair value through other comprehensive income (OCI).

I hope this meets the requirements of your question.

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