What drives consolidation complexity
Consolidation work involves combining the financial statements of a parent and its subsidiaries (and incorporating associates / joint arrangements) into a single set of group financial statements. The complexity rises with:
- Number of subsidiaries / step-down subsidiaries.
- Foreign subsidiaries with currency translation requirements.
- Inter-company transactions and unrealised profits.
- Acquisitions / disposals during the year.
- Non-controlling interests (NCI).
- Stake-changes in associates / joint ventures.
- Common-control transactions.
Ind AS, AS & Companies Act references
The relevant references:
- Ind AS 110 — Consolidated Financial Statements.
- Ind AS 111 — Joint Arrangements.
- Ind AS 112 — Disclosures of Interests in Other Entities.
- Ind AS 21 — Effects of Changes in Foreign Exchange Rates (translation of foreign subsidiaries).
- Ind AS 28 — Investments in Associates and Joint Ventures (equity method).
- Ind AS 103 — Business Combinations (acquisition accounting).
- Indian GAAP AS 21, AS 23, AS 27 — for non-Ind AS entities.
- Companies Act 2013, Section 129(3) — mandatory consolidation.
Groups required to consolidate
Listed parent companies with subsidiaries (mandatory under SEBI LODR); any Indian company with one or more subsidiaries (mandatory under Section 129(3)); groups preparing for IPO; family holding companies tracking aggregated wealth; foreign parent entities consolidating Indian subsidiary results upstream.
From group mapping to audit support
- Group structure mapping — parent, subsidiaries, step-downs, associates, JVs.
- Consolidation accounting policy alignment — uniform GAAP across all entities.
- Subsidiary trial balances — in functional currency, translated to presentation currency.
- Inter-company schedule — balances and transactions, unrealised profit elimination.
- NCI computation — opening, additions, share of profit / loss / OCI, dividend.
- Goodwill / capital reserve — from acquisition accounting; impairment testing.
- Currency Translation Reserve (FCTR) for foreign subsidiaries.
- Eliminations — share capital, intra-group sales, intra-group receivables / payables.
- Consolidated financial statements — CFS, CF, statement of changes in equity, notes.
- Audit support — coordination with the group auditor.
What you’ll need to share
- Group structure chart with shareholding %.
- Standalone audited financials of every entity.
- Inter-company schedule (balances + transactions).
- Acquisition / disposal documents during the year.
- Functional currency declaration for foreign subsidiaries.
- Translation rates (closing, average, historical).
- Prior-year consolidation working papers.
- Group accounting policy manual.
How long & how we charge
For a 5–10 entity group: 4–6 weeks. Larger groups (15+ entities, multi-currency, mid-year acquisitions): 8–12 weeks. Fixed-fee, scoped on entity count and complexity.
Common questions on consolidation
Does Section 129(3) apply to all subsidiaries?
Yes — consolidation is mandatory whenever a company has one or more subsidiaries, associates or joint ventures. Exemption is rare and limited to specific scenarios.
How are foreign subsidiaries’ losses handled in consolidation?
Translated to presentation currency at the average rate; FCTR captures translation differences. Cumulative FCTR is recycled through P&L on disposal of the foreign operation.
Can the same auditor sign standalone and consolidated?
Yes for non-listed companies. For listed companies, the group auditor often relies on component auditors of subsidiaries; we coordinate.
Is consolidation under Indian GAAP different from Ind AS?
Yes — AS 21 / 23 / 27 are simpler than Ind AS 110 / 111 / 112. Goodwill amortisation, equity method scope, and disclosure depth differ. We work in both.
Talk to a partner.
A 30-minute call with a partner — no deck, no follow-up email blasts. Just a read on whether we’re the right team to consolidate your group financials.