A company had calculated interest accrued but not due on their fixed deposit as on 31-3-2010.
However, the company before approval of accounts made a pre-mature withdrawal of the FD. As a result the company had to bear loss of interest.
Suppose, interest accrued but not due accounted is Rs. 7 crore.
but on pre mature withdrawal they received only rs. 5 crore.
should the proportionate reduction in interest income be shown in accounts considering the effect of AS 4-events occuring after balance sheet date and AS -9 revenue recognition(i.ei income should be realizable or realized). if yes, then how? because i have never heard of provision for interest accrued.
CAclubindia
