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13/07/2024
Audit Panels of Companies should step up Engagement with Auditors - NFRA
CBIC issues fresh norm for recovery of GST dues
SEBI recognises BSE as supervisory body for research analysts, investment advisers
11/07/2024
CA Intermediate and Final May 2024 Exam Pass percentage and Toppers
10/07/2024
RBI urges CFOs of Banks to maintain open, honest communication with Auditors
Increase in size of documents upload for GST New Registration and Amendment
09/07/2024
NCLT bars CA from being appointed as statutory auditor for colluding with company’s fraudulent activities
07/07/2024
ICAI allowed to issue orders against Big Four affiliates - Delhi High Court
 
 
  Notification/Circulars
13/07/2024
Processing of refund applications filed by Canteen Stores Department (CSD).
Mechanism for refund of additional Integrated Tax (IGST) paid on account of upward revision in price of the goods subsequent to export.
Clarification on various issues pertaining to taxability and valuation of supply of services of providing corporate guarantee between related persons.
Guidelines for recovery of outstanding dues, in cases wherein first appeal has been disposed of
11/07/2024
Remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS)
Basel III Capital Regulations - Eligible Credit Rating Agencies (ECAI) - RBI
03/07/2024
Release of foreign exchange for Miscellaneous Remittances - RBI
Online submission of Form A2: Removal of limits on amount of remittance - RBI
25/06/2024
SEBI Master Circular for Electronic Gold Receipts (EGRs)
22/06/2024
Priority Sector Lending – Amendments to the Master Directions - RBI
Article Details
Consolidation of accounts for private limited companies
It is believed that to get correct picture of financials of a business, the financials of the subsidiaries & joint ventures of the company should be analyzed together. On this premise the concept of consolidation of accounts is devised & is the part of GAAP.  In the previous companies Act, there was no legal requirement of consolidation of accounts by a company. However as per listing agreement, the listed companies were required to consolidate their accounts along with subsidiaries
To ensure transparency & facilitate disclosure of clear & refined picture of the state of affairs of companies, the companies Act, 2013 made mandatory, the preparation of consolidated financial statements of all the subsidiaries , beside presenting its own financial statement.
The Ministry of corporate affairs had issued a couple of amendments to provide that preparation of consolidated financial statements shall not be required by:
  • An intermediate wholly owned subsidiary, other than a wholly owned subsidiary whose immediate parent is a company incorporated outside India.
  • A company which does not have a subsidiary or subsidiaries but has one or more associate companies or joint ventures or both for the financial year 2014-15.
 
More recently, on 16 January 2015, the Ministry of corporate Affairs issued another amendment which provided that “the requirements in respect of consolidation of financial statement shall not apply to a company having subsidiary or subsidiaries incorporated outside India only for the financial year commencing on or after 1st April, 2014”.
From the above amendment it appears that the MCA has given a temporary relief to companies having foreign subsidiaries. This is being provided to such companies to deal with the additional challenges in consolidation due to differences in accounting framework and reporting period followed by their subsidiaries.
From plain reading of this amendment it can be concluded that as a temporary relief, the companies having foreign subsidiaries are not required to consolidate the accounts of their foreign subsidiaries, but they are required to consolidate the accounts of Indian subsidiaries.
Having said this, as a matter of fact all the companies who are required to consolidate their accounts should start the process of consolidating them as early as possible since these requirements may require significant time & cost especially in case of large & mid-sized unlisted companies.