CA Inter P1 · Chapter 13 · Question 8 of 10
Which of the following indicates that a foreign branch of Sujal Ltd is an integral foreign operation under AS 11?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The branch sells only goods imported from the head office and remits the sale proceeds to the head office
Explanation
An integral foreign operation carries on business as if it were an extension of the reporting enterprise's operations; a typical example given in AS 11 is a branch that sells goods imported from the reporting enterprise and remits proceeds to it. Local financing, local costs and sales, and significant autonomy are indicators of a non-integral foreign operation.
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