Can You File APR on Provisional Financials and Send the Audited Version Later?

This is the question we get from mid-November onward, every year, without fail: the host country's audit isn't going to be finished before December 31, the client has provisional numbers in hand, and they want to know if they can file now and true it up later.

The honest, technical answer is more precise than most advice you'll find on this: there is no explicit provision in the APR framework that grants you the right to file on provisional financials and revise later. That workaround exists in practice, and AD banks often tolerate it — but it is fundamentally different from a codified regulatory right, and treating it as one is a mistake worth avoiding.

Here's the distinction, and why it matters.

What Regulation 22(2)(a) actually says

The audit requirement for APR comes from Regulation 22(2)(a) of the Overseas Investment Regulations, 2022 (FEMA 400): "The APR shall be based on the audited financial statements of the foreign entity." Where the Indian entity has control, this is not qualified by any language permitting a provisional filing with a later correction. The only textual exception in the regulation is the proviso for no-control-plus-no-host-audit-mandate cases — which is a different scenario entirely from "the audit exists but isn't finished yet."

In other words: the regulation contemplates audited or, in narrowly defined cases, unaudited-but-certified financials. It does not contemplate a third category of "provisional, to be revised."

Compare this to the FLA Return — where a provisional mechanism genuinely exists

This is the comparison that makes the gap obvious. The FLA Return (Foreign Liabilities and Assets Return, filed by July 15 on RBI's FLAIR portal) has an explicit, codified provisional-filing mechanism: if audited accounts aren't ready by July 15, you file using provisional figures by that date, and you are required to submit a revised return with audited figures by September 30 — a fixed, named revision deadline, built into the FLA process itself.

APR has no equivalent provision. There is no "APR provisional filing" category in Regulation 22, no defined revision window, and no RBI-published deadline by which a "true-up" filing must occur. If your FLA experience has led you to assume APR works the same way, it's a reasonable assumption — it's just not correct. The two returns, despite both flowing from ODI activity, are governed differently on this specific point.

What actually happens in practice

Despite the absence of a codified right, many practitioners — including us, when circumstances genuinely require it — do file the APR based on unaudited figures with a covering note indicating that audited financials will follow, when the host-country audit is demonstrably still in progress as December 31 approaches. AD banks frequently accept this as a pragmatic accommodation, particularly where there's a clear paper trail showing the audit engagement is active and near completion.

But it's important to be precise about what this actually is: a discretionary accommodation by your AD bank, not an entitlement. Two consequences follow from that distinction:

1. There's no guaranteed acceptance. A different AD bank, or the same bank under different scrutiny, can reasonably take the position that an APR "based on audited financial statements" filed with unaudited numbers doesn't satisfy Regulation 22(2)(a) at all — meaning the filing could be treated as deficient rather than merely provisional.

2. There's no fixed revision deadline protecting you. Unlike FLA's explicit September 30 backstop, nothing in the APR framework obligates you — or protects you — with a defined window to submit the audited version. In practice, a revised APR can be filed by approaching your AD bank with a corrected Form ODI Part II and a covering letter, but this is a general correction mechanism, not a purpose-built provisional-to-audited pathway with its own deadline.

What we recommend instead of relying on this as a strategy

• Don't build your compliance calendar around the assumption that provisional filing is a safe fallback. Treat it as an emergency measure for a genuinely unavoidable timing gap, not a routine planning tool.

• Engage the host-country auditor early enough that this scenario doesn't arise. Given the fixed December 31 deadline discussed in our companion piece on APR timing, entities with a tighter runway between year-end and filing deadline (March/April year-ends, for instance) should be starting the audit engagement months before the deadline, not weeks.

• If you do end up filing on provisional numbers, document the reasoning. A clear paper trail — engagement letter with the host-country auditor, expected completion date, written note to the AD bank explaining the gap — is what turns a discretionary accommodation into a defensible position if it's ever questioned.

• Follow up formally once audited figures are available. Approach the AD bank proactively with the revised Form ODI Part II rather than waiting to be asked — the earlier this happens after the provisional filing, the stronger your position.

The short answer

Unlike the FLA Return, which explicitly allows provisional filing with a named revision deadline, the APR framework has no equivalent codified provision. Filing on unaudited numbers with a promise to follow up is a workaround that AD banks often accept in practice — but it rests on discretion, not on a right written into the regulation. Plan your audit timeline so you never have to test that discretion.

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