The revenues and operating income will reflect only company A's operations.
On the balance sheet, only the operating assets and liabilities of company A will be recorded.
However, there will be a line item on the asset side of the balance sheet that reflects the accountant's estimate of the value of the 60% of company B; the rules on how to estimate this value and how often it has to be updated can vary from country to country. If the financial results are in a consolidated statement, the operations of company A and B will be combined.
In India (since that’s the region the question is about), preparation of Consolidated Financial Statements is mandatory for listed companies or public companies that have a subsidiary, associate or a joint venture.
Obviously, if you have no such company, then consolidated statements are meaningless.
Companies commonly break out their consolidated statements by division or subsidiary so investors can see the relative performance of each, but in many cases this is not required, especially if the company owns 100% of the division or subsidiary.
To learn more about how to read consolidated financial statements, click here to check out our tutorial, Financial Statement Analysis for Beginners.
A VIE’S PRIMARY BENEFICIARY TYPICALLY IS ABLE to make decisions about the entity and share in profits and losses.
The primary beneficiary is the reporting entity, if any, that receives the majority of expected returns or absorbs the majority of expected losses.
CPAs SHOULD RECONSIDER A DECISION ABOUT WHETHER an entity is a VIE if its situation changes so its equity investment at risk is no longer adequate, some or all of the equity investment is returned to investors or the entity undertakes additional activities, acquires additional assets or receives an additional equity investment that is at risk. 46(R) is causing reporting entities to make new decisions about whether affiliated entities need to be consolidated into their financial statements.