Which of the following indicators suggest a foreign operation is NON-integral (NIFO)?
AAll goods sourced from parent
BOperations primarily in local currency, financed mostly locally, independent cash flows
CCash repatriated daily to parent
DNo local employees
Answer & Solution
Correct answer: B. Operations primarily in local currency, financed mostly locally, independent cash flows
1. Step 1: Indicators of NIFO per AS 11: autonomous operations, local currency dominance, independent financing/cash flows.
2. Step 2: IFO indicators are the opposite.
3. Step 3: Hence (A).
_Source: ICAI BoS CA Inter Paper 1, Ch 15 "Accounting for Branches including Foreign Branches"_