Friday, 17 October 2014

The MCA rationalises norms relating to consolidated financial statements and internal financial controls system

The Companies Act, 2013 (the Act) was largely operationalised from 1 April 2014. The Ministry of Corporate Affairs (MCA) vide notifications dated 14 October 2014 has amended/clarified provisions relating to:
·         the preparation of consolidated financial statements (CFS) by an intermediate wholly-owned subsidiary – amended to provide an exemption
·         the preparation of CFS by companies having just an associate or a joint venture – amended to grant a transition period
·         reporting on the internal financial control systems by auditors, mandatory for financial years commencing on or after 1 April 2015 – amended to grant a transition period
·         the Schedule III-related disclosures made in stand-alone financial statements which are not to be repeated in CFS.
The amendments would be applicable from the date of their publication in the Official Gazette

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