Conversion of loan into equity
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
19 December 2014
36 X (A Pvt. Ltd. Company in India) purchased
500 shares @ 1 Euro each of B (A company
incorporated outside India). Since B shares
capital consisted of 500 shares, it became wholly
owned susbsidiary of X.
X also gave loan of 700 Euro to B during
financial year 2013-14 which was recoverted
in indian Rs. As on 31/03/14.
Now, during financial year 2014-15, this
loan is converted into 700 shares of 1 Euro
each.
Please advise
1 What entry is to be passed
2 At what value, transaction to be booked
500 shares @ 1 Euro each of B (A company
incorporated outside India). Since B shares
capital consisted of 500 shares, it became wholly
owned susbsidiary of X.
X also gave loan of 700 Euro to B during
financial year 2013-14 which was recoverted
in indian Rs. As on 31/03/14.
Now, during financial year 2014-15, this
loan is converted into 700 shares of 1 Euro
each.
Please advise
1 What entry is to be passed
2 At what value, transaction to be booked
19 December 2014
Journal Entry will be
Investment in XYZ dr
to Loan A/c
to foreign Exchange fluctuation
if gain is there
or
Investment in XYZ dr
foreign Exchange fluctuation dr.
to Loan A/c
if loss is there
the Exchange rate will be rate effective on the date of conversion.
Investment in XYZ dr
to Loan A/c
to foreign Exchange fluctuation
if gain is there
or
Investment in XYZ dr
foreign Exchange fluctuation dr.
to Loan A/c
if loss is there
the Exchange rate will be rate effective on the date of conversion.
Message likes :
1 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
- Tax on Deemed Capital Gain
- Exiting partner in partnership firm in gst portal
- F & O PROFIT REPORTING FOR AY 2026-27
- Regarding ITR filing with more value than showing in AIS/TIS
- Type of Capital Gain
- LIABILITY ADJUSTMENT
- Difference in GSTR3B system generated which is correct and actual Payment it asks
- GST ON TRAVELLING BILLS
- VALUATION OF PRIVATE LIMITED COMPANY SHARES
- NRI INSURANCE ADVISOR
- Can a single LLP in India legally operate multiple unrelated businesses (Travel, Cloud Kitchen, Ecom
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
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
