I have 2 questions regarding practical problem being faced while consolidating parent and subsidiary company. I could not find answers to these in AS 21. PLEASE QUOTE SOME AUTHORITATIVE SECTIONS/ CASE LAWS / AS/ GUIDANCE NOTE WHILE ANSWERING. The questions are:
1) After consolidating financial statements what happens to Notes of Accounts of Subsidiary company. Should it be included as part of Consolidated financial statement as it is (i.e.,all) or partially included, or not included at all
2) a) Suppose the intercompany balance does not get knocked off fully because there is some dispute between holding and subsidiary company how should the difference be treated ? Assume each company has its own justification for passing the entries in their books in a particular way.
b) How should Auditor deal with such differences?
Please answer each question separately.
Thanks.
CAclubindia
