Bills of exchange

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pankaj kumar (Querist)
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12 October 2011 silly but gud Question.
i studied dat B/R appeared under heading Loans n advances in d Balance Sheet of a company...........not under current assets. What is d logic behind putting it Loans n advances.

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
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12 October 2011 Refer the new Schedule VI page 33

as per it, Non current assets includes Long term trade recievable (including trade receivables on deferred credit basis)

many of the times Bills Recievables are drawn for long period and also many of the times the Bills Recievable are drawn for the purpose of long term financial arrangements

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
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12 October 2011 When the trade recievable B/R are drawn for long period they r to be classified under "Non Current Assets"

When they r drawn for long term financial arrangement they r to classifed under Long term Loans and advances

It is the long term purpose, which is the determinable criteria for the same

CA Pushpendra Gaur

CA Pushpendra Gaur (Expert)
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12 October 2011 When the B/R are short term and drawn for sales or trade, they are to classified under "Trade Receivables" under Currents Assets.

For the short term Financial arrangement, to be classified under Short term loan and Advance.

Always remember, it's the purpose which is the determining force, not the name B/R itself