Consolidation of Financial Statements
The Reserve Bank of India, in its requirement of disclosures in Financial Statements has included AS 21: Consolidated Financial Statements (CFS), that includes consolidated Balance Sheet, consolidated Profit and Loss Account & notes, explanatory material that form an integral part thereof and also consolidated cash flow statements.
Consolidated Financial Statements are presented for a group of entities under the control of a parent. A parent is an entity that has one or more subsidiaries. For the purpose of CFS it may be noted that if a parent does not have subsidiary but has investment in associates and joint ventures, it will be required to prepare CFS. However, for the purpose of quarterly reporting under SEBI guidelines, CFS will not be necessary if the parent does not have subsidiary but has investments in associates and joint ventures. For the purpose of this guidance a parent would mean a Consolidating Bank.