Procedures consolidating foreign subsidiaries
More specifically, this Statement replaces FASB Statement No.
8, Accounting for the Translation of Foreign Currency Transactions and Foreign Currency Financial Statements, and revises the existing accounting and reporting requirements for translation of foreign currency transactions and foreign currency financial statements.
There is another view which believes that CFS is not required if there is no subsidiary as Sec 129 requires consolidation to be done as per AS 21, but as per our view the applicability of CFS is governed by Sec 129 and not AS 21, AS 21 only prescribes the method once CFS is required to be done under any statute. However, the said exemption was only for the financial year 2014-15.
Accordingly, such companies come within the purview of consolidation from FY 15-16 onwards.
Summary Application of this Statement will affect financial reporting of most companies operating in foreign countries.
AS 21 says that if a company is required to do consolidation then consolidation is required to be done as per criteria set up in AS 21.A subsidiary is a company that is controlled by another 'parent' company.The subsidiary acts and operates like its own entity but it still is connected with the larger company.- Earlier only listed companies was required to do consolidation as listing agreement required the same but with companies act 2013, sec 129 has defines financial statement to include CFS.Consolidation requirement under Companies Act, 2013 (‘Act, 2013’) Section 129 (3) read with Rule 6 of the Companies (Accounts) Rules, 2014 (Rules) provides manner of consolidation of financial statements of subsidiaries pursuant to Schedule III of the Act, 2013 and the applicable Accounting Standards.
Organizing Your Information Setting Up a Worksheet Combining Financial Statements Eliminating Duplicate Values Community Q&A Many large companies are partially or entirely made up of smaller companies that they've acquired throughout the years.