A 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
@ 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.
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Piyush Tanwar
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