Revenue booking

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A private limited company is into EPC business. It has 100% subsidiary company which is special purpose vehicle for a particular segment of customers. Agreement with client is signed by subsidiary company. This subsidiary company wants to sub contract EPC to its parent company. 

Now can the parent company record revenue in its books for the value of EPC sub contracted to it from subsidiary company? If yes then similar EPC value will be expense for subsidiary company. 

Please confirm if revenue can be recorded in this manner. 

Replies (3)
Yes revenue should be recorded in each books of account on the basis of their sharing... As from tax perspective and accounts also both r treated as separate entity and maintain separate books of accounts..... In case of dividend distribution or sales transactions made between both companies... We record in both books of accounts.
Thanks Divakar. But when EPC contract is given by subsidiary company to parent company, can it be considered as revenue for parent company
Sure mam.... Holding company should record revenue in their books as it is subcontracted to him... .. And wait for experts reply also


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