Non Availability of Financial Statements of Associate Concern as it is into Liquidation

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CA Final Student
48 Points Posted on 03 March 2022

Dear Colleagues,

What to do in case Associate Company in which we hold 38% has not prepared its Financial Statement as the same is in Liquidation. We had communication with IRP, but as his information they are in the process of preparation of FS for FY 19-20. And we need to file Annual Financial Statement for 20-21, also we had filed suit against the company and hence we can not make our investment to Zero in our FS.

Question 1 :
How to provide independent audit report? Shall we provide note for the same or Shall we qualify the report?

Question 2 :
While filling AOC-4 there are 2 options - CFS or Standalone FS.

If we choose standalone FS then it will be treated as prove that we don't have anything to receive from them. If we choose CFS then 

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On 03 March 2022 at 13:59 Report
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Quick Summary
This discussion addresses the challenge of an associate company, in which a 38% stake is held, being in liquidation and thus unable to provide its financial statements. The query focuses on how to handle the independent audit report and the correct procedure for filing the Annual Financial Statement (AOC-4) when consolidated financial statements (CFS) cannot be prepared due to the non-availability of the associate's statements. Advice suggests explaining the situation in AOC-1 and filing a revised AOC-4 once the statements become available.

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90 Points Posted on 03 March 2022
It is suggested that you attach AOC-1 and explain in col no 5 6 & 7 of that that since BS is not available neither received as invester nor available in public domain . and from sources the said company is in liquidation under control of RP and vide your request to RP ihe nformed that same is not available. therefore consolidated FS statements can not be made nor can be filed in AOC -4 CFS . but in MGT -7 fill the col made for associate or holdings as the case may be. You can write that as and when such FS received yowill file revised aoc l. Thus you will be protected of your investment
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On 03 March 2022 at 19:38
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Professional
1979 Points Posted on 06 March 2022
Yes , explain reason of non consolidation in annexure AOC -1
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On 06 March 2022 at 07:12

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