Consolidation

System
System Posts: 100,534 🤖 Admin 🤖
edited 12:08PM in AAT member discussion
Can anyone help by reminding me of account consolidation?

I am preparing two company accounts. The two companies are under common ownership and they trade with each other. When is it appropriate to consolidate and when is it not?

Thanks.

Ben

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Consolidation

    If they are under common control they are associated companies and the CT limits should be split. If one Company owns a controlling stake in the other they are in a group and should be consolidated.

    Annette
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Consolidation

    In terms of the financial statements. If they are small companies then Section 248 of Companies Act exempts them from having to prepare consolidated accounts, so you would just prepare separate financial statements for them both, with the relevant related party notes in their respective accounts. [Edit] If they are not small or if S248 doesn't apply then you must consolidate.

    Annette has mentioned what would happen with the corp tax.

    kind regards
    Steve

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