Buyers credit

Save Share

This query is : Resolved

Mayur Mahamuni (Querist)
Follow

06 June 2015 What is buyers credit and how it works to finance business needs. Also what are compliances regarding this from audit point of view.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

06 June 2015 "How Buyer’s Credit works

DBS arranges a line of credit with overseas banks to help you import goods
The overseas bank pays us directly, and we then pay your supplier on the import due date
You then pay the overseas bank on the buyer's credit due date
We can arrange import bills up to USD 20 million, ensuring a one-year line of credit for raw materials and three years for capital expenditure goods"
The rate of interest will be around 3% besides exchange fluctuation and RBI requirements will be taken care of By DBS.
You can choose your bankers like State bank of India or other banker.
From the audit point of view you have to check the compliance of RBI requirements, accounting of foreign exchange differences as per AS 11 and Capitalization of borrowing costs as per AS16.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now