- This topic has 5 replies, 2 voices, and was last updated 11 years ago by
.
- Posts
Dear Mike
If person A owns all the shares in entity B and all the shares in entity C, is there need for consolidation? Supposedly there is need for consolidation, who is parent entity for consolidation purposes?
Of course there’s a need for consolidation! The shareholders of company A want to know how their company and its two subsidiaries are performing!
A different question would be if company A owned all the shares in company B and company B owned 60% of the shares of company C, is it necessary for company B to prepare consolidated accounts.
The answer to that is “No” there is no need for a parent company (B) to prepare consolidated figures where the parent (B) is itself a wholly owned subsidiary of another (A)
Does that help?
Mike,
There is no company A, there are only companies B and C. Physical person A is owner of those companies.
Whoa Mike!!!! Read the full question (RTFQ)
Sorry Perist
OK, we have an individual that wholly owns two companies. Is there a need for consolidation? NO!
You can today establish two companies where you are the only shareholder. Are you going to consolidate?
And our shareholder is only a parent if he / she has children 🙂
Better?
Mike,
Little better but still not absolutely clear.
If the situation were different and there is in fact company A that controls companies B and C then situation is clear and company A is parent and consolidation is needed. But if companies B and C are controled by individual A than there is no need for consolidation, isn’t this potential source of manipulation?regards
- You must be logged in to reply to this topic.