AS 21 - Consolidated Financial Statements
This standard applied when accounting for investment in
subsidiaries in a separate financial statement of the present.
For consolidating financial statements in a way to present
financial information about a group as that of an enterprise, the
below mentioned steps must be taken:
- Eliminate the cost to the parent of its investment made in each
of its subsidiaries and such parent's entity portion of each fits
subsidiaries, at the date when the investment in such subsidiaries
are made
- any additional cost to the parent company of the investment in
the subsidiaries over the parents company's share of equity of
subsidiary, at the date on which investment in such subsidiary is
done, must be shown as goodwill for recognizing as the asset in its
consolidated financial statements.
- When the cost to the parent of the investment in the subsidiary
is lower the the parent company's share of the equity of
subsidiary, a date on which the investment in such subsidiary is
done, the difference must be treated as the capital reserve in the
consolidated financial statements
- a portion of minority interests in net income of the
consolidated subsidiary for reporting period must be recognised and
adjusted against income of the group fro arriving at the net income
which is attributable to owners of such parent ocmpany;
- a portion of minority interest in net assets of the
consolidated subsidiaries must be recognized and provided for in
consolidated balance sheet distinctly from the equity and
liabilities of the parent company.