Treatement of waiver of loan and accumulated interest
This query is : Resolved
Nishant singh Rathour
(Querist)
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
- GST REFUND ISSUE ON PURCHASE OF PLANT AND MACHINERY
- WRONG GSTR7 ENTRIES ACCEPTED ERRONEOUSLY
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
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
