Requirement to Prepare Group Accounts
The companies act introduced a completely new provision exempting some groups from preparing consolidated accounts. There are two grounds.
- Similar groups can claim exemptions on grounds of size
- Parent companies (except for listed companies) whose immediate parent is established in some countries need not prepare consolidated accounts. The accounts must give the name and country of incorporation of the parent and state the fact of the exemption. In addition, a copy of the audited consolidated accounts of the parent must be filed with the company accounts. Minority shareholders can, however, require that consolidated accounts are prepared.
The exemption from preparing consolidated accounts is not available to:
- Public accounts
- Banking and insurance companies
- Authorized persons under the law
- Companies belonging to a group containing a member of the above classes of undertaking