In this article we will discuss about the advantages and disadvantages of holding company. The advantages of holding company are in brief: (1) A holding company is a legal personality and it is very easy to form a holding company because we simply have to purchase the controlling interest of other companies. (2) Each member of the group has to [...]
Here is a compilation of top nine problems on holding companies with its relevant solutions. Problem 1 (Wholly Owned Subsidiary): Note: Investment which is made by the Holding Company in the form of shares of subsidiary company is replaced by the subsidiary company's assets and liabilities. Problem 2 (Goodwill): The following are the Balance Sheet of H and S as [...]
Foreign subsidiary companies should be consolidated along with other subsidiary companies in the usual manner. This will be possible only if the trial balance of the foreign subsidiary is first converted into 'home' currency. The rules for conversion are the same as for foreign branches. There may, however, be subsidiary companies in some countries where the political or economic conditions [...]