08 December 2021
Our company (which is in India) provided a loan to the American subsidiary for a period of three years. The interest we are charging on monthly basis.
For adjusting loss/gain against exchange rate, against interest amount we are making necessary provision against unpaid amount.
The loan period is for 3 years, whether yearly we have to disclose the impact of currency fluctuation on the principal amount in our financials? Also request to confirm procedure followed against interest income is correct?
08 December 2021
yes under the accounting standards issued by ICAI and new ICDS , you have to show it in your profit and loss under Gain or loss in exchange flu cation and interest income earned from overseas subsidiary is allowed under income tax act under section 43A .
08 December 2021
Thanks. Impacts on a principal amount due to exchange rate difference will be an increase or decrease in asset value, correct? How will treat exchange rate difference against unpaid accumulated interest?
CAclubindia
