I have a Pvt. Ltd. company and have given a corporate guarantee in form of Fixed deposit on behalf of other Pvt. Ltd. to SBI for loan taken by them.
There loan has been NPA and SBI have liquidated our FD. So what should be the treatment for the same in our books.
Should we convert the FD amount receivable from them or should we write it off as loss.
You need to write it off as loss ( Dr. P/L account and Cr.Fixed Deposits)
How ever the IT Dept may not allow the expense as it is not a business expense.
Regards,
Srinivas
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