Understanding a Holding Company A Basic Introduction to Holding Companies and How They Work . To understand the concept of a holding better, imagine that you and I decided we wanted to invest together. We have Blue Sky Holding Company open a brokerage account with a discount brokerage

31st December 31st March A/c Dr Account To Share amalgamation amount application money Average Profits Balance c/d Bank Account Dr bonus shares calculated Capital Employed Capital Reserve Companies Act Company Limited Consolidated Balance Sheet cost Current Assets Current Liabilities Date Particulars L.F. Debenture Redemption Fund Debenture Preparing simple consolidated financial statements Although 2011 saw a number of new accounting standards issued in respect of groups, throughout 2012 the Paper F3/FFA syllabus still continues to The illustration shows how a parent company has control over a subsidiary. At Paper F3 level, it TOPIC : ACCOUNTS OF HOLDING COMPANIES INTRODUCTION When a company acquires majority shares in the ownership capital or is in a position to influence or control the management of the other company, the company is called a Holding Company and other company a Subsidiary. Unit 1 Introduction to Company Accounts The Institute of Chartered Accountants of India. IntroductIon to company accounts (46) of the Companies Act, 2103, "Holding company", in relation to one or more other companies, means a company of which such companies are subsidiary companies. Corporate Accounting Page 6 ON THE BAIS OF PUBLIC INVESTMENT a. Private company - A private company means a company which by its arti cles a) Restricts the transfer of its shares b) Number of members to two hundred c) Prohibits any invitation to the public for any shares d) Prohibits acceptance of deposits from the persons. b. ACCOUNTING FOR SHARE CAPIT AL "A Company is an artificial person created by law, having separate entity with a perpetual succession and a common seal." Also prepare Notes to Accoun