This query is with reference to GSR 739 - 2006 issued by MCA regarding applicability of Accounting standards for SMC.
Para 2 (f)
“Small and Medium Sized Company” (SMC) means, a company-
(v) which is not a holding or subsidiary company of a company which is not a small and medium-sized company"
My interpretation of this clause is that if holding or subsidiary of the company under audit is not an smc then all the standards will be applicable to the entity. Following are queries :
1. If the holding company is a foreign company then whether the circular should be applied to ascertain the status of the foreign company.
2. If yes if the holding company is not listed then data for the turnover and borrowing of holding will not be available to the auditors of the company under consideration.
3. In case of two companies having holding and subsidiary relationship to which company the rules should be applied first as clause (v) as mentioned above should be ascertained keeping in view point status of holding /subsidiary company as smc or non smc.
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