Our company has taken a CC facility from bank for which other company has provided 3rd party guarantee in the form of FD. Now the loan has become NPA and bank has adjusted the 3rd party FD to recover the dues and made the CC outstanding amount NIL. What should be the treatment for same in our books. Should we provided the 3rd party FD as liability or shown it as income.
Illustration
Opening Outstanding CC- 3,00,00,000/-
3rd party FD adjusted - 3,00,00,000/-
Closing Balance- NIL
CAclubindia
