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Explain whether a subsidiary needs to prepare accounts to the same date as the parent company.

Explain whether a subsidiary needs to prepare accounts to the same date as the parent company.

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Whenever a company owns any subsidiary, then it is required to prepare consolidated financial statements and enclose it in its annual reports as per the Companies Act as well report the consolidated for revenue authorities purposes. Thus it will be a necessity for the subsidiary to have its financial statements aligned along with its parents. However at time it may not be necessarily possible for subsidiary to have same date as its parent. In such a case, it is noteworthy that the maximum allowable difference in the accounting dates shall be 3 months. But for the purpose of the accuracy and reliability purposes. Hence for this purpose it's always advisable to prepare separate financial statements of subsidiary similar to that of the parents accounting date.

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