Dear Friends
I have a query on AS-11 and AS- 16
We have availed the INR loan for purchasing Fixed Assets from India. The loan was repayable in 60 monthly installments. To save interest cost, we have converted that INR loan into FCNR(B) loan from Bank after one year. All fixed Assets purchased were duly installed before conversion of that loan into FCNR(B) loan. That FCNR (B) loan is subject to roll-over in six months. That loan is also repayable in monthly installments denominated in USD.
My query is that whether that loan is Monetary Liability under AS 11. Whether, we required to re-state that loan at closing rate on 31st March and charge the gain/loss from Profit & Loss account.
As section 43A is not applicable in this case. The Assets was purchased from India and loan is availed in INR. Kindly guide us.
with regards
CAclubindia
