Inter company settlements

This query is : Resolved

Sachin D Hinge (Querist)
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26 August 2009 Dear Professional Colleagues,

I am working in a UK based insurance company. We are a listed co in London stock exchange,

We have almost 50 subsidiaries. We have only 3 entities who has bank accounts for transactions.

We have lot of inter company transactions which kept accululated since 2003 onwards.
We now want to clear this inter co receivable & payables.

Seeking your advise on the ways in which we can settle those .
1.Bank Payments (Between 3 entities holding bank a/cs)

2.Elimination of common payables & receivables

3. Utilization of Free Reserves.

Any other methods, plz suggest.

Regards,

CA Sachin Hinge

Manoj Kumar Jain

Manoj Kumar Jain (Expert)
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26 August 2009 Dear Mr Sachin,

We can find solutions to your issues. But we have to understand the transactions before any solutions is given. In these circumstances, I request you to send me a seperate mail on the subject to my personal mail Id manojkumarchajed@gmail.com wherefrom we can interact and give you the best possible solution.

With Best Regards

T Manoj Kumar Jain

M Prabhakar Menon

M Prabhakar Menon (Expert)
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26 August 2009 One of the basic principles of accounts is that each transaction affects two accounts not only in one entity but also the opposite entity by clubbing entries u are eliminating a lot of data which will or may be required at a later date by any stakeholder how do you plan to resolve that. Further at tthe time of closing the accounts of the 3 entities you must have submitted a/c confirmations of the other dummy entities too. Now its in the best interest of all to get the records straight Short cuts will hurt later.First of all get the books updated rest will follow easily.

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