Radhika (Consultant) (320 Points)
11 May 2011Dear all,
Please inform, whether the financial statements of a holding company can show the figures of its foreign subsidiary in dollars, or any currency other than Rupees? Seek answer from the learned members... Plz clarify.
Thans & Regs,
Radhika
Suresh Prasad
(www.aubsp.com)
(15630 Points)
Replied 11 May 2011
In my opinion No Because the following reasons:
Consolidated financial statements are the financial statements of a ‘group’ presented as those of a single enterprise.
Parent company needs to inform the users about the financial position and results of operations of not only of their enterprise itself but also of the group as a whole.
For consolidating foreign subsidiaries, the first step is to convert the figures of foreign subsidiary into reporting currency on the basis of rules as prescribed by AS 11 (revised 2003), “The Effects of Changes in Foreign Exchange Rates”. The amount of exchange difference is calculated as the balancing figure, which is accounted for as post-acquisition profit/loss. After such conversion, the consolidation is done in usual manner
Suresh Prasad
(www.aubsp.com)
(15630 Points)
Replied 11 May 2011
SANTOSH SHAH
(Company Secretary)
(754 Points)
Replied 12 May 2011
| Originally posted by : Radhika | ||
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Dear all, Please inform, whether the financial statements of a holding company can show the figures of its foreign subsidiary in dollars, or any currency other than Rupees? Seek answer from the learned members... Plz clarify. Thans & Regs, Radhika |
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Hi Radhika
Please find attached latest MCA Circular dated 08/02/2011, with reference to your query.
It states as follows :-
" The company (Holding Co) shall give Indian rupee equivalent of the figures given in foreign currencyappearing in the accounts of the subsidiary companies along with exchange rate as on closing day of the financial year;
regards
Santosh Shah
Upender Anand
(C.A final)
(58 Points)
Replied 02 June 2011
Fristly convert amount given in foreigen currency or in coller into rupee, and if any gain or loss arise due to exchange its transfered to profit and loss account, after this prepare conosolidated balance sheet in usual manner,
CAclubindia
