I would like to ask a query that our company has received advance amount of Rs. 20 Lacs from foreign country against supply of goods about 3 years ago. it could not supply goods to them due to any reason. Now such amount is standing on liablity side of the B/S as advance from customer.as such amount falls under deposit as per rules, therefore we want to write off such amount before 31.03.2015. my question is
whether we can write off such amount? during written off, is any provisions of FEMA hits? can it written off under which AS if any?
28 March 2015
For refunding the amount permission of Reserve Bank is required. For taking it as income there is no requirement but you can inform Reserve bank.
Based on the accounting policy it can be taken as income. Amount in respect of unclaimed / undisputed Security Deposit, Earnest Money Deposit, Deposit of temporary consumers and Miscellaneous Deposit of suppliers and contractors which is pending for more than three years and which as per the policy of management is not payable, is considered as income.
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