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Editorial Board on Accounts and Audit
  • CFS

    by Kamal Garg on Thursday, August 03, 2017 at 12:17 PM

    ABC Limited acquired 100% equity share capital in PQR Limited on 30.6.2017. So on ABC Limited the requirement to prepare and present CFS would be applicable. As far as year 2016-2017 is concerned there would be holding company's interest as well as minority interest, but how about the comparatives to be presented, as in the comparative year there was no holding company interest

    Replied byEditorial Board Monday, November 13, 2017 at 06:15 PM

    As per para 30 of AS 21 Consolidated Financial Statement ‘On the first occasion that consolidated financial statements are presented, comparative figures for the previous period need not be presented. In all subsequent years full comparative figures for the previous period should be presented in the consolidated financial statements’. Accordingly, no comparative information is required to be presented. 

    However, as per para 22 of AS 21, Consolidated Financial Statements, in order to ensure the comparability of the financial statements from one accounting period to the next, supplementary information is often provided about the effect of the acquisition and disposal of subsidiaries on the financial position at the reporting date and the results for the reporting period and on the corresponding amounts for the preceding period. 

    So, in your case, ABC Ltd. can provide supplementary information about the effect of acquisition of PQR Ltd. on the financial position and the results for the FY 2015-16. Disclosures should be made in accordance with AS 21.

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