1.Realign
the Financial year
Section :
Section 2(41) of CA-13
Issue to
be addressed :
A company which is the holding company or a
subsidiary or associate of a company incorporated outside India, and is
required to follow a different FY for consolidation of its accounts outside
India, may be allowed to follow such different FY upon making an application to
the Central Government. The Committee noted that if such a company, or body
corporate, ceases to be a holding, subsidiary or associate company of the
foreign entity, CA-13 currently contains no provision allowing such company to
revert to the FY required to be followed under CA13. This hinders the company’s
or body corporate’s ability to accurately measure its revenue and earnings in
that FY, as per Indian laws.
Amendments /Proposed Recommended by the Committee
The Committee said that there would also be a need to verify the
company’s status and filing position.Thus, the requirement of obtaining an
approval from Central Government should be incorporated.The Committee proposed
that such companies, which cease to be associated with a foreign entity, should
be allowed to file a fresh application with the Central Government in a
prescribed form to allow them to revert back to the FY followed under CA-13.
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