Question

Beta Ltd., an Indian company, operates a 100% subsidiary in the UAE. The subsidiary manufactures and sells products only in the Gulf region, incurs costs and revenues in AED, borrows locally in AED, and its management makes decisions independently of the parent. However, the parent prepares consolidated financials in INR. What should be the functional currency of the UAE subsidiary as per Ind AS 21?

A INR, since it is the reporting currency of the group
B AED, since the entity primarily generates and spends cash in AED
C USD, as it’s the global reporting currency standard
D Both AED and INR are acceptable
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