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Editorial Board on Accounts and Audit
  • Contingent liability in consolidation

    by Chirag on Wednesday, September 11, 2019 at 05:31 PM

    Dear Sir, A Ltd (holding company) has Bill Receivable of Rs 3000 in its Separate Balance sheet. Bill of Rs 4000 were accepted by B Ltd ( a subsidiary company). Out of this A Ltd has discounted bill of Rs 1000 which is appearing as a contingent liability in its Separate Balance sheet. Query- For consolidation,Rs1000 will be shown in Bill Payable. So, whether CONTINGENT LIABILITY 1000 SHOULD BE REMOVED IN CONSOLIDATED F.S?? PLS CLARIFY THE IMPACT OF THIS??

    Replied byEditorial Board Friday, September 20, 2019 at 07:13 PM

    Dear Chirag,

    The response to your query can be found in the AS commentaries - AS 21. Please refer this link.

    http://accountsandaudit.taxmann.com/filecontent.aspx?query=bills+discounting&id=107010000000370301&tophead=true

 
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