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Hello Sir,
I have two questions, one on group accounts and the other on ethics.
GROUPS:
I learnt that the word that describes a subsidiary is “control.” Therefore, if company “A” has less than 50% threshold but has the VOTES of the other dispersed NCI which gives company “A” “control” will company “A” be required to consolidate/prepare group accounts or it will still remain a bizarre kind of NCI?ETHICS:
If directors are by reason of profit related bonuses or loan covenant overstate profit, what becomes of dividends to be declared and paid, taxes, retained earnings, etc. Are all these going to be calculated based on the overstated profit , or will it (profit)be reversed?Thank you.
Groups
Yes – likely to consolidate. Even if 0% owned but control exists. 🙂
Ethics
Depends on local legal system Distributable profits etc not in our syllabus.
For SBR all we can say is correct error making a prior period adjustment (assuming problem arose in prior year).
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