Accounting treatment of bank guarantee
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 October 2012
How do we recognise bank guarantee in books and proper accounting treatment about this ,when bank guarantee issue to bank guarantee settelment.
17 October 2012
The commission paid on BG (BAnk Guarantee) shall be debited to Bank charges / Guarantee commission (Depending upon the materiality) When bank guarantee is invoked, the concerned banker pays the amount to your creditor and the amount should appear as loan in your books.
17 October 2012
Bank Guarantee is non fund based limit sanctioned by banks and other financial institutions.
BG is Contingent Liability and shown only in Notes to the Accounts.
There is no entry required when no collateral or security is given.
However, entry is required when any security by way of Cash margin like security deposit, FD etc and that can be shown under current assets in Balance sheet as Margin money on BG.
When BG is settled or expired, entry for margin money should be reversed.
BG is Contingent Liability and shown only in Notes to the Accounts.
There is no entry required when no collateral or security is given.
However, entry is required when any security by way of Cash margin like security deposit, FD etc and that can be shown under current assets in Balance sheet as Margin money on BG.
When BG is settled or expired, entry for margin money should be reversed.
Message likes :
4 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Reporting Income under Section 44ADA
- Off Market debit and credit transaction
- Itr 1 processing
- Showing Gift from relative in ITR for this year
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- ITR returnFY25-26
- ITR selection for salaries and capital gain less than L
- Short Term Capital gain on shares bought and sold after 2018 onwards
- ITR 2 Short Term gain & Long term gain
- Form 10E u/s 89(1). Need clarification because experts opinions differ !!!!
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
