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SUBSIDIARY COMPANY –
ACCOUNTING PERSPECTIVE
by :
DR. T.K. JAIN
AFTERSCHO☺OL
centre for social entrepreneurship
sivakamu veterinary hospital road
bikaner 334001 rajasthan, india
FOR – CSE & PGPSE STUDENTS
(CSE & PGPSE are free online programmes
open for all, free for all)
mobile : 91+9414430763
5 DECEMBER 09 www.afterschool.tk 1
My word.....
My purpose here is to give overview regarding
consolidation of accounts of holding and subsidiary
company for budding entrepeneurs. This is a basic
information. For details read other books. Be
entrepreneur, change the society, change the world. Go
with positive spirit. Please pass this presentation to all
those who might need it. Let us spread knowledge as
widely as possible. I welcome your suggestions. I also
request you to help me in spreading social
entrepreneurship across the globe – for which I need
support of you people – not of any VIP. With your help, I
can spread the ideas – for which we stand....
5 DECEMBER 09 www.afterschool.tk 2
What is a subsidiary company?
5 DECEMBER 09 www.afterschool.tk 3
What is a holding company ?
5 DECEMBER 09 www.afterschool.tk 4
Legal requirements : Sec. 212
Holding company must disclose the following
along with its accounts :
1. balance sheet of subsidiary
2. profit and loss statement of subsidiary
3. report of the board of directors of subsidiary
4. statement of interest in subsidiary and
changes in interest during last year
5. auditor report of subsidiary and if any
information is not available, details about that
5 DECEMBER 09 www.afterschool.tk 5
Part I & II of schedule VI
regarding holding company
Part I : the holding company's balance sheet
must merge the balance sheet of subsidiary
Part II : the P & L account of holding company
must merge P & L account of subsidiary
* intercompany transactions between holding
and subsidiary company must be eliminated
* contingent liabilities will not have liabilities
regarding subsidiary company
5 DECEMBER 09 www.afterschool.tk 6
Statement of interest
5 DECEMBER 09 www.afterschool.tk 7
What is minority interest ?
5 DECEMBER 09 www.afterschool.tk 11
Consolidated balance sheet
:
liabilities assets
shares 1000 Plant & mach. 1400
Minority 233
creditors 450 debtors 650
profit 367 TOTAL 2050
TOTAL 2050
5 DECEMBER 09 www.afterschool.tk 12
NOTES...
5 DECEMBER 09 www.afterschool.tk 13
What is preacquisition profit /
loss?
Holding company acquires subsidiary on a
particular date, the profit / loss before that date
is called pre-acquisition profit / loss
it is shown separately in the holding company's
balance sheet.
Suppose profit for the year was 100. Holding
company acquired subsidiary in middle of the
year (on 1/10/09) so pre-acquisition profit is
50.
5 DECEMBER 09 www.afterschool.tk 14
What is capital profit / goodwill ?
http://www.scribd.com/people/documents/3704370
http://www.scribd.com/doc/28692491/How-to-Prepa
http://www.scribd.com/doc/28442846/Accounting-f
http://www.scribd.com/doc/28013426/Accounting-f
http://www.scribd.com/doc/27560955/Accounting-f
http://www.scribd.com/doc/27239762/How-to-Set-U
5 DECEMBER 09 www.afterschool.tk 16
Download more resources
http://www.esnips.com/web/onlinespeeches
5 DECEMBER 09 www.afterschool.tk 17
Download resources on entrepreneurship
http://www.esnips.com/web/bikanersocial123
http://www.esnips.com/web/pgpsepresentations
http://www.esnips.com/web/audiobikaner
http://www.esnips.com/web/entrepreneurship-article
http://www.esnips.com/web/ONLINESPEECH
http://www.esnips.com/web/entrepreneurship-casest
http://www.esnips.com/web/AUDIOBIKANER123
http://www.esnips.com/web/communication-skills
5 DECEMBER 09 www.afterschool.tk 18
DOWNLOAD MORE
RESOURCES...
http://www.esnips.com/web/afterschoool/
http://www.esnips.com/web/afterschool
http://www.esnips.com/web/AUDIOLECTURESAF
http://www.esnips.com/web/pgpsestudymaterial123
http://www.esnips.com/web/inspiringlectures123
http://www.esnips.com/web/fleshquizesforcs123
5 DECEMBER 09 www.afterschool.tk 19
Download more resources
http://www.esnips.com/web/GREATFLASHQUIZE
http://www.esnips.com/web/AUDIOBIKANER123
http://www.esnips.com/web/ONLINESPEECH
http://www.esnips.com/web/audiobikaner
5 DECEMBER 09 www.afterschool.tk 20
Download more material...
http://www.scribd.com/doc/13094880/Economics-A
http://www.scribd.com/doc/23407782/26-july-Econ
http://www.scribd.com/doc/23393466/10-July-Econ
http://www.scribd.com/doc/6584113/Business-Econ
http://www.scribd.com/doc/6683895/Economics-for
http://www.scribd.com/doc/14676180/Accounting-E
5 DECEMBER 09 www.afterschool.tk 21
http://www.scribd.com/doc/27851096/Economics-fo
http://www.scribd.com/doc/6583898/5-July-Econom
http://www.scribd.com/doc/14646951/Accounting-a
http://www.scribd.com/doc/14646963/Accounting-a
http://www.scribd.com/doc/14633486/ACCOUNTIN
http://www.scribd.com/doc/14646994/Accounting-a
5 DECEMBER 09 www.afterschool.tk 22
Download more material ....
http://www.scribd.com/doc/14646947/Accounting-a
http://www.scribd.com/doc/14676195/Accounting-E
http://www.scribd.com/doc/14676185/Accounting-E
http://www.scribd.com/doc/14630181/Accounting-L
http://www.scribd.com/doc/27183173/World-Wide-
5 DECEMBER 09 www.afterschool.tk 23
THANKS....
GIVE YOUR SUGGESTIONS AND JOIN
AFTERSCHOOOL NETWORK / START
AFTERSCHOOOL SOCIAL
ENTREPRENEURSHIP NETWORK IN
YOUR CITY / CONDUCT WORKSHOP ON
SOCIAL ENTREPRENEURSHIP IN YOUR
COLLEGE / SCHOOL / CITY
AFTERSCHOOOL@IN.COM
JOIN OUR NETWORK TO PROMOTE
SOCIAL ENTREPRENEURSHIP
5 DECEMBER 09 www.afterschool.tk 24