04 December 2010
Situation: Company A directly holds 47% in company B and 60 % in Company C.
Company C holds 4% in Company B.
Question- Is A required to consolidate B in its books as per AS 21.
( that is, Does A directly (47%) and indirectly holds more than 50 % of the nomimnal value of equity of B. That is will the holding be 47%+4%= 51% OR, will it be 47%+ (60% of 4%= 2.40%) = 49.40%)
(assume it is purely based on shareholding and no control over the Board of Directors is evidenced)
04 December 2010
Yes, Consolidation is required as per AS21. The period of holding wil be calculated as following A directly (47%) and indirectly holds more than 50 % of the nomimnal value of equity of B. That is will the holding be 47%+4%= 51%
CAclubindia
