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Capital erosion

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(Querist)
04 April 2009 If a subsidiary co. has made a loss and parent co. has capitalsed it, then whether it requires qualification in auditor's report? Please also give reference to support the answer.
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CA. B.SRINIVASULU

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CA. B.SRINIVASULU (Expert)
04 April 2009 Subsidiary and Parent company are two different entities under law. One company loss cannot be capitalised by the other.

Only for presenting the consoldiation accounts both will be combined.

Next year individual accounts will be continued as it is.

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