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Foreign entity

Challa.Praveen kumar (Articleship) (21 Points)

15 July 2021

Indian Holding company has a subsidiary in US , does subsidiary in US require any audit in India. If,require what compliances ? and what to take as a financial year and in which currency does it need to prepared.

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6 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 15 July 2021

Subsidiary does not have any control over Parent. The parent can audit the subsidiary. The audit is done usually in their own presentation currency and translated while consolidating,

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CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 16 July 2021

Parent auditor or the subsidiary Auditor can audit the US subsidiary and the currency in which the subsidiaries deals should be the currency

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CA. Heet Shah (Tax Consultant & Practitioner) (6180 Points)
Replied 16 July 2021

Holding Company is liable for Subsidiary. Therefore Audit would apply to Subsidary incase of consolidation.

CA. Heet Shah (Tax Consultant & Practitioner) (6180 Points)
Replied 16 July 2021

Consolidated Financial Statement will be prepared in the functional currency of the Company.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 16 July 2021

Of course, presentation currency and functional can be the same as well in the case of national companies. For a US subsidiary, it’s US dollar separate entity statements. To the Indian parent, it is presented currency and translated to primary functional currency