Kindly guide about accounting and reflections of SC's in parent books of account
Parent Indian unlisted Public Ltd Co-A
Owns
Dubai based WOS-B
B owns 100% wos in Dubai C & 70% in African D
Dubai C holds 100% wos in Sri Lanka E
In parent books, we are not going beyond B's accounts. Ignoring C,D,E
Auditors may qualify.
Any violation of RBI and other guidelines,AS.
Regards
What is SC's? We only follow Direct equity method and anything subsidiaries hold as assets eg. goodwill from other subsidiaries will reflect as your assets just like liabilities. so, consolidate only B
However, there is a problem in worthless MBA's which uses linear function to define how much stake all companies have in a circle which is not important for Reporting.
SC stands for subsidiary Co.
But there is more than 2 step down subsidiary cos.
India parent A & Dubai wos B are both managed by single family. How they being common directors on both boards execute contract ..in different capacity. Same family members in both the companies
Kindly guide
There can be family directors managing different subsidiaries. What we have to see is who has control in consolidation.
To make it easy, the moment you buy shares, above 51%, Subsidiary accounting starts.
If its 50:50, can be joint operations or venture accounting
if its between 20-49%, we can account it as associate
if its less than 20, its a normal share Aquisition.
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