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Editorial Board on Accounts and Audit
  • Ind AS Applicability

    by MOHAN on Thursday, December 15, 2016 at 04:55 PM

    Dear Sir More than 20% shares of our Company (A) are hold by another company (B). Net worth of our company (A) is less than 250 cr but Net worth of our shareholder Co.(B) is between 250-500 Cr., Hence Ind.-AS will be applicable on our Co. (A) from 2017-18. But as on 31st March 2016, Net worth of Subsidiary Co.(C) of our shareholder company (B) get exceed by 500 crores, in such case Ind As shall be applicable on Co. B & C from FY 16-17. Pls clarify Ind-As shall be applicable on our Co. (A)

    Replied byEditorial Board Tuesday, December 20, 2016 at 12:21 PM

    In the present case, Company C is required to prepare Ind AS financial statements for the FY 16-17 and onwards.

    As per the Rules, if Ind AS is applicable on subsidiary company then holding company is also required to comply with Ind AS from same FY. Accordingly, Company B ltd should also prepare the Ind AS financial statements from FY 16-17 and onwards.

    As per the rules, Company A is required to adopt Ind AS from FY 17-18 onwards. However, the holding company (Company B) is required to adopt Ind AS from FY 16-17 onwards.



    Consolidated Financial Statements

    In our opinion, the consolidated financial statements shall be prepared as per Ind AS from FY 16-17 onwards.


    Company A

    For FY 16-17, Company A should prepare its individual financial statements as per AS. Further, company A should also prepare Ind AS financial statements for FY 16-17 for consolidation purposes.

    Company A's individual financial statements has to be as per Ind AS from FY 17-18 onwards.

    Assumptions:-
    It is presumed that Company A and Company C are subsidiaries of Company B (holding company). Listing status of the entities is not provided and hence Ind AS applicability as provided in the query is assumed to be correct.

 
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