The Indian subsidiary company shows debtor of INR 60,000 receivable from Foreign Parent company but the Foreign Parent company shows creditor of eqv. amount of INR 50,000 , the difference is mainly due to some invoices that were recorded in Parent company at later date. Now while preparing Consolidated Financial statement, how to treat above inter-company adjustment ? Please advise
First adjust your invoices, reconcile the right balance between parent and subsidiary, translate them into finctional currency method if the presentation of subsidiary is in local currency to get the right translated reserves and then finally eliminate the current account. This is because, receivable of P is a payable of S and vice versa.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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