Loan
This query is : Resolved
26 December 2013
The following is the query:-
There is a loan transaction between two NRIs in SGD (Singapore $) but the repayment is made and accepted in INR in their respective bank accounts in India. The Loan transaction never appeared in the books of accounts in India but since the repayment is in INR how to reflect the same in the books of accounts of the lender? Request the experts to give your opinion on the above matter.
There is a loan transaction between two NRIs in SGD (Singapore $) but the repayment is made and accepted in INR in their respective bank accounts in India. The Loan transaction never appeared in the books of accounts in India but since the repayment is in INR how to reflect the same in the books of accounts of the lender? Request the experts to give your opinion on the above matter.
27 December 2013
First of all, from the facts it appears that books of account have not been prepared correctly, even if the transaction of loan is in foreign currency then the same should be disclosed in the financial statements.
.
The same should have been disclosed at the closing rate of foreign currency on the valuation date.
The books must be rectified by passing adjustment entry.
Loan a/c. Dr
To capital a/c
Bank AC Dr
To loan a/c
And the difference if any should be adjusted in foreign exchange difference a/c.
.
The same should have been disclosed at the closing rate of foreign currency on the valuation date.
The books must be rectified by passing adjustment entry.
Loan a/c. Dr
To capital a/c
Bank AC Dr
To loan a/c
And the difference if any should be adjusted in foreign exchange difference a/c.
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