Here is a compilation of top nine problems on holding companies with its relevant solutions. Problem 1 (Wholly Owned Subsidiary): Note: Investment which is made by the Holding Company in the form of shares of subsidiary company is replaced by the subsidiary company's assets and liabilities. Problem 2 (Goodwill): The following are the Balance Sheet of H and S as [...]
Foreign subsidiary companies should be consolidated along with other subsidiary companies in the usual manner. This will be possible only if the trial balance of the foreign subsidiary is first converted into 'home' currency. The rules for conversion are the same as for foreign branches. There may, however, be subsidiary companies in some countries where the political or economic conditions [...]
In India, a subsidiary company is not allowed to acquire shares in its holding company. But if the subsidiary company had acquired shares in the holding company before it became the subsidiary or before the commencement of the Companies Act, 1956, the company can continue to hold the shares [section 42 (3)]. However, the subsidiary company will not be able [...]