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While booking cost for a subsidiary company

A/c entries 440 views 3 replies

Rakesh Suvadeep Sahoo

Financial Accountant

23 Points Joined February 2020

Dear Gurus,

I am a parent company accountant, got an invoice for my subsidiary. How can I treat this in my books of Accounts.

Like I will Dr Cost/Exp & Cr Supplier

Then I will book a Debit Note in my system like Dr. My Subsidiary & Cr Cost/Exp & also raise the debit note to my subsidiary so that he can pay me off at the end of year.

Kindly provide your valuable advice or rectify me if I am wrong. Also I am going to pay the same in my books(for information)

Replies (3)

Since subsidiary company and holding company are two different companies under Companies act. Any transaction between two will be same as regular purchase or sale transaction.

Hence you have to book it as regular purchase availing input credit and payment for same has to be made within 180 days from invoice date.