At the time of acquisition of shares in the subsidiary company fixed assets of the subsidiary company are revalued. Profit or loss on the revaluation of fixed assets is treated as a capital profit or loss. The profit is not available for dividend and must appear on the liability side of the balance sheet of the subsidiary company under the heading Capital Reserve or may be used for writing off goodwill. The loss on revaluation may be, met out of revenue profit. At the time of consolidation, the capital reserve is divided among share holders, i.e minority interest and holding company. Holding company’s share out of such capital profit is either treated as such or deducted from goodwill or cost of control and vice versa in case of loss on revaluation. Minority share holder’s share is added to minority interest. Profit at the end of the year will be charged with the depreciation on the revised values.