Adjustment of the loan taken for employee
This query is : Resolved
CA Shruti kuchhal
(Querist)
21 March 2013
Dear All,
We have given a car by taking loan to an employee and paid the EMI for some time but now the employee has left our organisation and the EMI will be paid by the employee himself but he has repaid some of the EMI paid by us.
what will be the treatment of such receipt and the loan outstanding and the car in the books as the loan is still in the name of the organisation and the car is sold to the employee.
We have given a car by taking loan to an employee and paid the EMI for some time but now the employee has left our organisation and the EMI will be paid by the employee himself but he has repaid some of the EMI paid by us.
what will be the treatment of such receipt and the loan outstanding and the car in the books as the loan is still in the name of the organisation and the car is sold to the employee.
21 March 2013
Hi Shruti,
First transfer the loan outstanding and car registration in the name of employee.
What ever you received from Employee, consider it as sale proceeds and compare it with (wdv-outstanding loan value) of Car in Company accounts.
In simpler words, close all accounts in relation to the car and loan, book the closing balance in P&L after considering the cash received from employee.
Account for profit or loss.
First transfer the loan outstanding and car registration in the name of employee.
What ever you received from Employee, consider it as sale proceeds and compare it with (wdv-outstanding loan value) of Car in Company accounts.
In simpler words, close all accounts in relation to the car and loan, book the closing balance in P&L after considering the cash received from employee.
Account for profit or loss.
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