meda mounica asked 5 years ago
hello sir ,
when a parent co. holds 51% shares , it is consolidated as subsidiary and when it subsequently sells 20 % shares , it becomes associate and needs to be consolidated as an associate , right? why in pm q.7 ., they treated it as control is temporary ? and dint specify about consolidating as an associate?
Ravi Staff answered 5 years ago
you should specify that 51% shareholding is temporary in nature and hence it will not be consolidated as subsidiary. further you should mention that not enough information is given regarding plan of company for remaining 31% shares, if its temporary we should not consolidate as associate, if its not temporary we should consolidate as associate.
by giving such answer, you will exhibit knowledge and you will be safe irrespective of what answer they draft in suggested answers