Immediate consolidation

Dear members

while consolidating one of the clients financials i came across the following problem

A ltd hold 99.02% of B ltd out of which 49.09% was acquired on 30th september with securities premium of rs 1000 crore and rest  49.93% was acquired  on 20th jannuary . while preparing the analysis of profit on respective dates(30th sep and 20th jan) which amount is to be treated as pre and post . 


Dear Bhupender,

Please note the following (from the AS)


 " If an enterprise makes two or more investments in another enterprise at
different dates and eventually obtains control of the other enterprise, the
consolidated financial statements are presented only from the date on which
holding-subsidiary  relationship  comes  in  existence.  "
From the above it is clear that consolidation should be prepared from the date on which holding subsidiary relatio ship comes.
And subsidiary relationship comes when a company holds more than 50% shares

Dear  saikiran,

i am not confused on the matter that when to treat it as subsidiary . i am concerned that i have to consolidate the financials of A ltd so i have to calculate the amount of capital reserve/ goodwill for this we require to prepare AOP . Now while preparing AOP( i am talking about as on 30 september ) whether i should consider the securities premium balance as pre acq or post acqusition for the 49.09 % share of profit of the holding


Since consolidated financial statements are presented from the date on which holding subsidiary relation exists, all the profits & reserves of 49.09% will be of pre acquisition. 



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