Description
AS-21 Consolidated Financial Statement
Accounting Standard-21
Consolidated Financial Statement
Chandan N. Patekar-M1141 Shailesh A. Patil-M1142
Objective
To formulate principle and procedures for preparation and presentation of consolidated financial statements.
Scope
Applicable to following enterprises ? Group of enterprises under the control of parent ? Investments in subsidiaries Excluded cases ? Amalgamation ? Investment in associates ? Investment in joint ventures
Definitions
Parent An enterprise that has one or more subsidiaries Subsidiary An enterprise that is controlled by another enterprise (Parent) Group Parent and all its subsidiaries Consolidated Financial Statement Financial statement of a group presented as those of a single entity
Composition
Consolidated Balance Sheet ? Consolidated Profit and Loss statement ? Notes, additional statements and explanatory materials that outline an essential part thereof
?
Note The consolidated financial statements are presented, to the extent possible, in the same format adopted by the parent for its separate financial statements
Scope of Consolidated Financial Statements
?
The consolidated financial statements are compiled on the basis of financial statements of Parent and all enterprises that are controlled by Parent The consolidated financial statement of a Parent organization should encompass all the subsidiaries, both domestic and foreign companies
?
Scope of Consolidated Financial Statements
However, Parent shall not include its subsidiaries when ? Control is intended to be for a short term and the subsidiary is required with a view to its subsequent disposal in near future; or ? It operates under a severe long term restrictions, which significantly impair its ability to transfer funds to the parent
Consolidation Procedure
Basic Procedure The financial statements of Parent and subsidiaries should be combined on a line by line basis by grouping together the like items of assets, liabilities, income and expenses
Consolidation Procedure
The holding company should eliminate its cost of investment in each of its subsidiaries ? If cost of investment>holding’s share in equity-Godwill ? If cost of investment
AS-21 Consolidated Financial Statement
Accounting Standard-21
Consolidated Financial Statement
Chandan N. Patekar-M1141 Shailesh A. Patil-M1142
Objective
To formulate principle and procedures for preparation and presentation of consolidated financial statements.
Scope
Applicable to following enterprises ? Group of enterprises under the control of parent ? Investments in subsidiaries Excluded cases ? Amalgamation ? Investment in associates ? Investment in joint ventures
Definitions
Parent An enterprise that has one or more subsidiaries Subsidiary An enterprise that is controlled by another enterprise (Parent) Group Parent and all its subsidiaries Consolidated Financial Statement Financial statement of a group presented as those of a single entity
Composition
Consolidated Balance Sheet ? Consolidated Profit and Loss statement ? Notes, additional statements and explanatory materials that outline an essential part thereof
?
Note The consolidated financial statements are presented, to the extent possible, in the same format adopted by the parent for its separate financial statements
Scope of Consolidated Financial Statements
?
The consolidated financial statements are compiled on the basis of financial statements of Parent and all enterprises that are controlled by Parent The consolidated financial statement of a Parent organization should encompass all the subsidiaries, both domestic and foreign companies
?
Scope of Consolidated Financial Statements
However, Parent shall not include its subsidiaries when ? Control is intended to be for a short term and the subsidiary is required with a view to its subsequent disposal in near future; or ? It operates under a severe long term restrictions, which significantly impair its ability to transfer funds to the parent
Consolidation Procedure
Basic Procedure The financial statements of Parent and subsidiaries should be combined on a line by line basis by grouping together the like items of assets, liabilities, income and expenses
Consolidation Procedure
The holding company should eliminate its cost of investment in each of its subsidiaries ? If cost of investment>holding’s share in equity-Godwill ? If cost of investment