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Query on accounting for Loan perk

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C Reddy

Entreprenuer

68 Points Posted on 25 February 2010

Hi All,

Suppose a Company includes around Rs.4000 as loan perk in the salary structure of its employees, though there is actually no such loan perk being given, what will be the accounting implications for the company because if they show a loan given to employees it would amount to an asset to the company, isn't it?

Is this a correct practice? Please clarify.

Thanks

Replies (1)

Amir

Learner

4898 Points Posted on 25 February 2010

Dear Chandana,

If Co. is not providing any loan then it cannot account the same in it's books..........

Generally, Co's includes this thing to attract employess by inflating salary package..It means that if employee wants then he can avail loan facility but the accounting question will arsie only when it is actually given...

Yes u r rite, if given then it will be recognized as asset in the books of co's