Interest on unsecured loan
This query is : Resolved
Nupur Sharma
(Querist)
30 April 2013
We are finalising the books of a Listed Co. I have been asked to provide for the interest expense on an unsecured loan that we had taken from a related party.
At what rate of interest should i book this expense? Is there a statutory limit on the maximum rate of interest that would be allowed as expense???
Plz help!
At what rate of interest should i book this expense? Is there a statutory limit on the maximum rate of interest that would be allowed as expense???
Plz help!
CMA Ramesh Krishnan
(Expert)
12 May 2013
Interest rate may be agreed by both parties which is arms length in nature. there is no statutory fixed interest rates, in case borrowing company has any other third party loans and paying interest, the interest rate will not be lower than that rate
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