Integral and non integral foreign operation

best example for foreign operations is foreign branch. 

when foreign branch works depending on Head office. i.e. branch selling the products which is supplied by HO. when no supply sale at branch will affect. in that case foreign branch activities are called integral foreign operations.

when foreign branch works independently. i.e. branch selling products head office as well as outside products also. branch has authority for decision making. in that case foreign branch activities are called non-integral foreign operations.

it's perhaps, the trivial information but still imperative to know.

thanks for the info

it was best explained

Can someone explain to me integral and non-integral foreign operation with the help of examples

THE DIFF OF TRANSFER NIFO TO IFO IN BRANCH ACCOUNT 

WHERE WE CAN USE OR IT IS SHOW IN B.S AS IT IS.

THE DIFF OF TRANSFER NIFO TO IFO IN BRANCH ACCOUNT 

WHERE WE CAN USE OR IT IS SHOW IN B.S AS IT IS.

 Classification of Foreign Operations as Integral or Non-integral - Tutorial (vskills.in)

 a non-integral foreign operation accumulates cash and other monetary items, incurs expenses, generates income and perhaps arranges borrowings, all substantially in its local currency. Contrastingly, An integral foreign operation carries on its business as if it were an extension of the reporting enterprise’s operations. For example, such an operation might only sell goods imported from the reporting enterprise and remits the proceeds to the reporting enterprise.

It is complex, and if you look up at page 17 Decision tree here getdocument (mca.gov.in)

However, both integral and non integrals follow normal consolidation procedures of intragroup transaction based on the relationship. This standard AS-17 is no so cool because it doesn't define presentation or measurement. What's the use then??. Let me check Indas and find out the ease of it to understand 

You will understand what to do. But this standard does not explain funding

Indas is also just the same when it comes to thresholds:

Revenue test: must be > 10% of combined revenue

Profit or loss test: must be > 10% of group profit or loss

Asset test: must be > 10% of combined segment assets

Lets discuss integral part:

Revenue will be same for both internal and external

Profit or Loss will be impacted due to interest on intragroup borrowings (In the consolidation, it will not impact as only external debt is considered, but will impact individual segment financial statements)

Assets will decrease due to supplying inventory, operating costs from bank. 

Non Integral part: None of them will be impacted i guess because this segment is independent.

Well, we didn't learn much today and no revelations apart from which segment will prepare financial statements. But you also got a chance to understand both Integral & Non integral operations may or may not prepare financial statements based on the above criteria.