Accounting treatment for booking advance on costs received from foreign subsidiary by indian parent


Premanand (Finance Manager)     12 February 2019

Premanand
Finance Manager 
 21 points

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Dear Teams and Experts:

I am writing to determine the following treatments:

1) There are receipts of advance on costs from foreign subsidiary of Indian Parent pertaining to services rendered.

2) How do we treat these and how do we recognize these, in our books as per Revenue recognition principles

3) What are the FEMA regulations pertaining to treatment of advance on costs pertaining to a foreign subsidiary remitting to Indian Parent

4) Do we have to keep in mind any limits and statutes / regulations as applicable and inform corporate bodies apart from the AD banks for these transactions

Please advise expert opinion and if someone wants detailed business scenario, can explain individually to such expert, such that we are following the correct accounting practises and regulatory practises as per FEMA & Accounting Principles.

 

 




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