banner_ad

Conversation of ecb in to equity

This query is : Resolved 
Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
13 February 2013 What is the treatment of gain or loss on conversation of External commercial Borrowing in to Equity??
Profile Image

Sanjay Chauhan (IFRS)

Profile Image

Sanjay Chauhan (IFRS) (Expert)
13 February 2013 Normally ECBs are raised with a fixed conversion option in terms of dollar and no of shares.

At every balance sheet date, ECBs are valued at closing spot rate as per AS 11 (monetary items, as it is not manadatorily convertible).

Thus at the time of conversion, there will be exchange variation impact because of the difference between last reporting date and conversion date. This difference will go to income statement.

Now the liability in INR will get transferred into Equity share capital and share premium. You may find that if the conversion would have happend on day 1, the share premium would have been X amount, however due to chnages in exchange rate, the share premium will now by Y amount.

Do revert back if there is any clarification.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now


CCI Pro
Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!


Similar Resolved Queries


loading


Unanswered Queries


banner

Trending Online Classes

view all classess

CCI Pro
Meet our CAclubindia PRO Members
Subscribe Now

Follow us
add to google news



Answer Query



Quick Links



Browse by Category




Latest Job Openings

View all
Company
ARTICLESHIP 28 May 2026
Accounts, Audit & Compliance Executive

Shyam Joshi & Associates

Pune

B.Com

View Details
Company
14 May 2026
Senior Accounts Executive

Karan Gupta & Co.

New Delhi

Graduate (Any)

View Details
Company
08 May 2026
CHARTERED ACCOUNTANT

SHAH LADHA AND ASSOCIATE

Ahmedabad

CA

View Details
Company
22 May 2026
U.S. Financial Reporting & Consolidation Manager

Karia Overseas

Ahmedabad

CA

View Details
Company
ARTICLESHIP 23 May 2026
Article Assistants

Acupro Consulting

Gurgaon

CA Inter

View Details
Company
26 May 2026
Audit executive

vdsr & co LLP

Chennai

CA Inter

View Details
Company
19 May 2026
Fundraising Expert

MentorsWorld Ventures Private Limited

Ahmedabad

Others

View Details
Company
19 May 2026
Article, CA & Paid Assistant Positions

Aggarwal Sarawagi and Co

New Delhi

CA

View Details