Third party collateral adjusted treatment in our books.

Stat Audit 215 views 1 replies

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

 

Replies (1)
If you are going to compensate to the third party for their FD then credit third party ledger. Or else offer it as income.


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