AS 21_Treatment of Investments

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Pl clarify the following sentence used in Para 13 point a of the AS 21 with an example.

the cost to the parent of its investment in each subsidiary and

the parent

on which investment in each subsidiary is made, should be

eliminated;

s portion of equity of each subsidiary, at the date

 Is it like what we do Amalgamation -Inter Co Holdings .???  THanx in advance

Replies (1)

In consolidation all transactions between the group should be eliminated.So investments in subsidiary should be eliminated from the holding co and Share capital in Subidiary to that extent should also be eliminated.

This is solely for consolidation purposes.

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