Bhagya M G (Practicing Company Secretary) (42 Points)
21 March 2017A private company has some receivables from its foreign customer. Can the receivable amount be converted as investment in that entity ? What are the RBI compliances.
What would be the situation if the cusotmer has already written off the payables in its books and later it has to be capitalised
Piyush Tanwar
(Assistant Manager - Accounts)
(1432 Points)
Replied 21 March 2017
@ Bhagya
Receivable amount can't be converted to as investment in that entity as this is against the services rendered.
you can write off in your books if that will not be recoverable in future. otherwise you can reflect such outstanding in your books.
If that outstanding is in foreign currency , then you have convert that outstanding as per the rate of RBI on the closing of year end by Dr/Cr in the "Difference in Exchange" under Indirect Items in your books.
Thanks & Regards
Piyush Tanwar
CA Finalist and Internal Auditor
Mobile - 9717468521
Ajit Hegde
(CA - Final)
(1367 Points)
Replied 22 March 2017
CAclubindia
