Consolidated Balance Sheet

Accounting of holding & Subsidiary Company

Definition
Holding Company: - A company is one which acquire all or a 50% or aboe
equity share of any other company! which is called holding company"
Holding Company: - any company obtains the right of appoint of director in other
company! which is called holding company"
Subsidiary Company: - Share of a company which is acquired by any other
company & a company sold their rights to other company! which is called subsidiary
company"
Preparation of consolidated balance sheet:-
Consolidated balance sheet as on 31 Mar !!" #or Mr$ %a&i 's per Schedule (
)iabilities 'ssets
#" Share & Capital $$ #" %i&ed Assets $$
'" (esere & Surplus $$ '" )nestment $$
*" Secured +oan $$ *" Current Assets! +oan & Adances
a" Current Assets
b" +oan & Adances $$

," -nsecured +oan
$$
," .iscellaneous Assets
$$
5" Current +iabilities & /roisions
a" Current +iabilities
b" /roisions

$$
5" /&+ 0r" 12alance3
$$
Ho* to Calculate Holding %atio of Holding Company+
Holding , 4 5umber of share acquired by holding company
---------------------------------------------------------- $ #00
6otal Share of Subsidiary Company
7or8ing 5ote 9 #
Calculation of Pre - Post Part of P-)
/re /ost
:pening 2alance 1A3 Closing 2alance 123
$$$ 1C3 0ifference 1Closing 2alance 9 :pening 2alance3
0istribution 1According 6o .onth3
$$$ 103 $$$ 1;3
----------- -----------
$$$ 1%3 $$$ 1<3
----------- -----------
5ote: - =ere 6otal of 1%3 4 1A3 > 103 & 6otal of 1<3 4 1;3
7or8ing 5ote 9 '
Calculation of Pre - Post Part of .eneral %eser&e
Same as Calculation of Pre - Post Part of P-)
7or8ing 5ote 9 *
Calculation of /et 0orth:-
/articular /re /ost
;quity Share Capital :f Subsidiary Company $$$ -----
Security /remium $$$ -----
<eneral (esere $$$ $$$
/rofit & +oss $$$ $$$
:ther (esere $$$ -----
+ess :- .iscellaneous Assets 1$$$3 -----
6otal $$$ 1A3 $$$ 123
?5ote: - :pening balance of /&+ and general resere will be added in pre profit"
5et 7ealth of Subsidiary Company 4 1A3 > 123
5et 7ealth 4 1A3 > 123
% of =olding Company 1C3 % of .inority )nterest 103

=olding % of 1A3 =olding @0 % of 123
=olding % of /ost /&+ =olding % of /ost <eneral (esere
7or8ing 5ote 9 ,
Calculation of .ood*ill - Capital %eser&e
Cost of inestment of =olding Company 12AS 9 Assets3 4 $$
+ess: - /re /art of analysis 4 1$$3
-----------------------------------------------------------------
<oodwill A Capital resere $$$$
-----------------------------------------------------------------
)f 1>3 then it will be added in goodwill
)f 1-3 then it will be added in capital resere
7or8ing 5ote -5
Calculation of consolidated P-)
2alance of /&+ of holding company 4 $$
Add: - /ost /&+ of analysis 4 $$
-----------------------------------------------------------------
Consolidated /&+ $$$$
-----------------------------------------------------------------

7or8ing 5ote -B
Calculation of Consolidated .eneral %eser&e
2alance of <eneral (esere of holding company 4 $$
Add: - /ost <eneral resere of analysis 4 $$
--------------------------------------------------------------------------
Consolidated <eneral (esere $$$$
--------------------------------------------------------------------------
7or8ing 5ote 9 C
'd1ustment for miscellaneous 'ssets
.iscellaneous Assets
/reliminary ;&penses
0iscount on issue of share & 0ebenture
-nderwriting Commission
Adertisement ;&penses
%ictitious Assets
All .iscellaneous assets )s to be deducted from pre part of analysis See 7or8ing note *"
7or8ing 5ote- D
'd1ustment for re&aluation of fi2ed assets
-(0 1-pward (ealuation3 0(0 10ownward (ealuation3
1(eised Ealue 9 2oo8 Ealue3 12oo8 Ealue 9 (eised Ealue3
-(0 Additional 0epreciation 0(0 Saing )n 0epreciation
Add to /re /art 0educt %rom 0educt %rom Add to /ost /art
:f Analysis /ost /art of Analysis /re /art of Analysis of Analysis
See 7or8ing 5ote See 7or8ing 5ote See 7or8ing 5ote See 7or8ing 5ote
7or8ing 5ote
/articular /re /ost
;quity Share Capital :f Subsidiary Company $$$ -----
Security /remium $$$ -----
<eneral (esere $$$ $$$
/rofit & +oss $$$ $$$
:ther (esere $$$ -----
Add:- -(0 $$$ -----
+ess:- Additional 0epreciation ----- 1$$$3
+ess:- 0(0 1$$$3 -----
Add:- Saing in 0epreciation ----- $$$
+ess :- .iscellaneous Assets 1$$$3 -----
6otal $$$ 1A3 $$$ 123
Consolidated Assets 4 Assets 2alance of holding company > Assets 2alance of Subsidiary Company
> -(0 90(0 9 Additional 0epreciation > Saing )n 0epreciation

7or8ing 5ote 9 @
'd1ustment of mutual transaction:-
A3 )nter Company 0ebtorFs & CreditorFs
)n Assets side 4 0ebtorFs of holding company >
0ebtorFs of subsidiary company - .utual 0ebts
)n +iabilities side 4 CreditorFs of holding company >
CreditorFs of Subsidiary company 9 .utual 0ebts
23 )nter Company 2ills 6ransactionFs
)n Assets Side 4 2A( of holding company > 2A( of
Subsidiary company 9 .utual 0ebts
)n +iabilities Side 4 2A/ if holding company > 2A/
:f Subsidiary Company 9 .utual 0ebts
C3 )nter Company +oan 6ransactionFs
)n Assets Side 4 +oan Amount )s 5ot 6o 2e Shown"
)n +iabilities Side 4 +oan Amount )s 5ot 6o 2e
Shown"
7or8ing 5ote 9 #0
3nter Company Stoc4 5ransaction6s
A3 7hen (:/ is <ien At Cost /rice
/rofit 4 Stoc8 Amount & (:/ A #00 > (:/
23 7hen (:/ )s <ien At )noice /rice
/rofit 4 Stoc8 Amount & (:/ A #00
Condition # 7hen =olding Company /urchased <oods from Subsidiary Company
Amount of profit
% of holding company $ /rofit % of .inority )nterest $ /rofit
0educt from Consolidated /&+ 0educt from .inority interest Amount
Condition ' 7hen Subsidiary Company /urchased <oods from =olding Company
)n this condition the entire amount of profit is to be deducted from Consolidated /&+
)n 2alance sheet 4G Stoc8 of =olding Company > Stoc8 of Subsidiary Company 9 Amount of /rofit
7or8ing 5ote ##
'd1ustment for Di&idend:
#" 0iidend %rom /re /rofit
'" )nterim 0iided
0educt %rom :pening 2alance 0educt from 7or8ing 5ote , 0educt from 7or8ing 5ote 5
:f /&+ & after that we hae to 1Cost of inestment3 1Consolidated /&+3
Calculate /re & /ost /&+
Amount Amount
10iidend $ = %3 10iidend $ = %3
7or8ing 5ote #'
'd1ustment of unclaimed or proposed di&idend:-
Add to closing balance of /&+ & 0educt from wor8ing note 5
After that we hae to calculate /re & /ost /&+ 1Consolidate /&+3
10iidend $ = %3
7or8ing 5ote #*
'd1ustment of di&idend on preference share

0educt from wor8ing note * Add to wor8ing note 5
15et 7orth3 According to month 1Consolidated /&+3
1.eans it will diidend in to parts
/re month & /ost month3
/re /ost 10iidend $ = %3
;quity Share Capital $$ ---
<eneral (esere $$ $$
/&+ $$ $$
+ess:- /refH Sh" 0iidend 1$$3 1$$3
-------- ---------
$$$ $$$
-------- ---------
7or8ing 5ote #,
'd1ustment of Preference share capital
=aing )nestment 5ot =aing )nestment
/repare Separate 5ew 7orth ;ntire amount of preference share capital
7ill be add to minority interest
/re /ost
/reference Share Capital $$ ---
-------- ---------
$$$ $$$
-------- ---------
7ffect of ha&ing in&estment
7ffect 1$ Calculation of .ood*ill or Capital %eser&e

Cost of inestment of =olding Company 1;quity > /reference3 4 $$
+ess: - /re /art of analysis 1.ain 5et 7orth3 4 1$$3
+ess: - /re /art of analysis 1Separate 5et worth of /reference Share3 4 1$$3
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<oodwill A Capital resere $$$$
-----------------------------------------------------------------
7ffect $ Calculation of Minority 3nterest
.inority of equity share capital or % =olding in main net worth 17or8ing note *3 4 $$
.inority of /reference share capital or % =olding in /reference share capital 4 $$
----------------
$$$$
----------------
7or8ing 5ote #5
'd1ustment of Bonus Share
At the time of calculation of =olding % of =olding Company number of bonus share is not considered"