Accounting Treatment for waiver of loans
This query is : Resolved
22 August 2007
Dear Experts
The query which I'm posting is related to accounting treatment for waiver of loans specifically waiver of principal amounts.
Lets say A Ltd. took a loan for financing fixed assets and later on A Ltd. turned into loss making company.
Lender i.e. financial institution waiver off certain portion of principal and interest. Now the query is what should be the accounting treatment of waiver of principal in the books of A Ltd.
rgds
hitesh
Dear Experts
The query which I'm posting is related to accounting treatment for waiver of loans specifically waiver of principal amounts.
Lets say A Ltd. took a loan for financing fixed assets and later on A Ltd. turned into loss making company.
Lender i.e. financial institution waiver off certain portion of principal and interest. Now the query is what should be the accounting treatment of waiver of principal in the books of A Ltd.
rgds
hitesh
22 August 2007
In my opinion it should treat as deffered income & credit to P/L over span of Asset-life
23 August 2007
Hi hitesh our matching concept always demands for it. it our accounting principles set in by our institute.
*Can you say in which AS deffered revenue expenditure has mentioned ?
*Can you say in which AS deffered revenue expenditure has mentioned ?
Late CA Sampat Jain
(Expert)
23 August 2007
In my opinion it should be written off and crdited to profit and loss account as etra-ordinary item
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