Treatement of waiver of loan and accumulated interest
This query is : Resolved
19 May 2012
A company has taken loan from finantial Instutation but because of its poor finantial position it fails to repay the loan and interest.
As per the CDR some portion of loan and interest amount has been waived off.
What would be the accounting treatement of Waiver of Loan ,Interest and penal Interest.
Please specify the AS if any applicable.
As per the CDR some portion of loan and interest amount has been waived off.
What would be the accounting treatement of Waiver of Loan ,Interest and penal Interest.
Please specify the AS if any applicable.
19 May 2012
The subject would need more details..
To answer your query, the company would record gain on extinguishment of interest liability through income statement.
Similar for the portion of loan balance that is waived in CDR scheme.
Any penal interest paid can have two interpretation in the way it is documented / worded in the CDR scheme.
1. Penal interest is an expense in the income statement considering it to be exit fee;
2. if Considered similar to upfront then amortise over the new loan term.
To answer your query, the company would record gain on extinguishment of interest liability through income statement.
Similar for the portion of loan balance that is waived in CDR scheme.
Any penal interest paid can have two interpretation in the way it is documented / worded in the CDR scheme.
1. Penal interest is an expense in the income statement considering it to be exit fee;
2. if Considered similar to upfront then amortise over the new loan term.
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
- Supply through E-commerce Operators
- STCG....................................................
- AMOUNT RECEIVED UNDER COMPULOSRY ACQUISITION OF AGRICULTURAL LAND
- Sales return eway bill
- TAN for Partnership
- Relief u/s Section 89
- GST Registration Horse racing
- Section 43B(h) – MSME Invoice Paid Before Year End but After 45 Days
- E way bill for tractors
- Specified Profession
- Section 54F - Exemption on LTCG in 2026 for HP purchased in 2023
- Sales amount in Gstr1
- CG after sale of flat
- E Commerce GSTR1 & 3B how to file
- Nomination of Bank for refund in itr 2
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
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
