If the subsidiary comes up with further issue of share capital at a premium, the same was acquired by us in our holding ratio.... After acquition of further shares, the subsy BS will show Securities Premium.... Wat would be the tratment
Thanks in Addvance
Hold co will show the shares acquired at cost under its investments. the revised holding ratio will be calculated for the purpose of consolidation.
subs co will show the normal entries in it's books for issue of shares at premium.
Dear All,
The MCA General Circular No. 2/2011 dated 8/2/11 impliedly means that all Holding Companies has to prepare Consolidated Accounts as under AS21, be it listed/ unlisted/ pvt. ltd. whatever.
Please guide whether any siple format of consolidation would do? How the annual filing with MCA would be done, keeping the size constraint in view?
Please advise,
somnath
is schedule 6 is applicable to cfs also?
Satndalone balance sheet of subsidiary will show a share premium. Parent share will get eliminated at consolidation level and minority share will be part of minority interest.
Revised Schule VI is applicable to CFS also.
In the consolidated statement of accounts, share premium pertaining to holding company wil be eliminated against the investment in subsidiary in the holding company and balance share premium will be transferred to minority interests. This will smoothen the consolidation process.
However, in case if the share premium is restricted by law than, in there is also an international practice to recreate the share preimum account at the consolidation level by debiting the retained earnings and crediting the share premium account so that its identity is not lost at the Group financial statements.
Regards
SR
CAclubindia
