Whether revaluation reserve can be treated as free reserve??
As per RBI master circular no.11/2012-13 dated 02.07.2012 (direct Investment by Resident into JV/wholly owned subsidiary), an indian party is permitted to make investment in overseas JV, not exceeding 400% of the net worth as on the date of last audited balance sheet of the india party. It also clarifies that net worth means paid up capital & free reserve. If a company has a revaluation reserve in the books. Please advise that revaluation reserve, can be considered as NW for calculation of maximum investment in overseas JV??
Regards,
Mukesh Kumar
CAclubindia
