Accounting of investment in subsidiary

Ajay Singh Bhati (Manager (Accounts)) (215 Points)

08 April 2013  

Dear Members,

 

Please tell me how to do accounting of investment in form of machinery in foreign subsidiary company.

For example: Our company "ABC" is based in Mauritius, it has purchased machineries from a supplier of China and sent it to its subsidiary company "XYZ" in Africa as investment in form of machinery. Purchase transaction is ok but how to do accounting entry of this investment part in subsidiary company in the books of ABC.

One more thing must be mentioned that purchase price of machinery is $10,000 but it is being shown as investment in subsidiary foreign company with a value of $25000.

 

Seeking help guidance.

 

Thanks and regards