Are subsidiaries of non-SMC companies themselves eligible to be SMC?
AYes — irrespective of parent
BNo — they take the parent's status
COnly if independently audited
DOnly if more than 50% public-held
Answer & Solution
Correct answer: B. No — they take the parent's status
1. Step 1: SMC criteria exclude subsidiaries or holding companies of non-SMC entities.
2. Step 2: This preserves consistency across the corporate group.
3. Step 3: Hence (B).
_Source: ICAI BoS CA Inter Paper 1, Ch 3 "Applicability of Accounting Standards"_