Tag Archives: Consolidation of Accounts

Amendment in Companies Accounts rules, 2016


Ministry of Corporate Affairs came with amendment to the Companies (Accounts) Rules, 2014, last month. These rules has been published in official gazette on 27th July 2016 and came into force on that date. In this post, we will discuss these amendments in this blog post.

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Every Holding Company to Consolidate Financial Statements


Rule 6 of the Companies (Accounts) Rules 2014 deals with consolidation of Accounts. This rule got its power from second proviso to sub – section (3) of Section 129.

According to Section 129(3), where a company has one or more subsidiaries, it shall, in addition to financial statements provided under sub-section (2), prepare a consolidated financial statement of the company and of all the subsidiaries in the same form and manner as that of its own which shall also be laid before the annual general meeting of the company along with the laying of its financial statement under sub-section (2).

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SUBSIDIARIES AND CONSOLIDATION OF ACCOUNTS


As we have discussed earlier here, Section 129(3) discuss about consolidation of accounts.

Where a company has any subsidiary, the company shall prepare a consolidated financial statement of the company and of all subsidiaries in the same form and manner as that of its own.  The consolidated financial statement shall also be laid before the annual general meeting along with own financial statement.

The company shall also attach along with its financial statement, a separate statement containing the salient features of the financial statement of its subsidiaries.

Under this section, the word subsidiary shall include associate company and joint venture.

Form of Statement containing salient features of financial statements of subsidiaries [Rule 5]

According to Second Proviso to Section 129(3) discussed earlier here, where a company has any subsidiary, the company shall prepare a consolidated financial statement of the company and of all subsidiaries in the same form and manner as that of its own.  The consolidated financial statement shall also be laid before the annual general meeting along with own financial statement.

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