Consolidation of Subsidiary Co's Accounts

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Srinivas

Finance Manager

96 Points Posted on 14 June 2010

Dear all,

We have a subsidiary company in which we hold 51% stake. In spite of being majority stakeholder, all these years we were not consolidating the accounts, on the ground that, we don't exercise control over the day to day affairs of the subsidiary and used to account under "equity" method. Now, our Management has decided to consolidate the account.s. But the issue is that, we, the Holding Company's accounting year is Jan-Dec and that our subsidiary's is Feb to Jan. Before consolidation, our Investment in subsidiay shows USD. 22 millions. Kindly suggest the steps to be taken for Consolidating when there is a period difference in the accounting year. Kindly quote the relevant IFRS/Indian Accounting Standard.

Thanks & regards,

Srini,

Kingdom of Bahrain.

Replies (4)

CA VINAY BANSAL

In job with KPMG

323 Points Posted on 15 June 2010

Hi Srinivas Ji,

Please refer the Accounting Standard 21 & 23 for ur problem.

It is stated that the year of the subsidiary should end before the end of the financial year of the Holding Co and the max difference between the closing of two companies should be max 6 mths.

U get an updated statement of accounts of subsi prepared and then consolidate the same.

Refer Sec 217 of the cOMPANIES ACT

vaibhav

student

132 Points Posted on 15 June 2010

You need to make subisidary balance sheet for the period you have and there after discloser U/S 212 required.

Guest

Posted on 15 June 2010

Mr. srinivas is in bahrain and obviously he is asking for accounts in bahrain so IFRS ll be applicable and NOT AS of India or companies act of India, kindly see under which section question has been posted and accordingly reply.

Mr, Srinivas i would suggest you go through IAS 27 on consolidated and seperate financial statements, ur question would be answered in it.