Recognition of Interest Accrual on Borrowings Classified as NPA Under Ind AS 109
- Blog|News|Account & Audit|
- < 1 minute
- By Taxmann
- |
- Last Updated on 5 December, 2023
Latest from Taxmann
Para B3.3.1 of Ind AS 109, Financial Instruments, states that a financial liability (or part of it) is extinguished when the debtor either:
(a) discharges the liability (or part of it) by paying the creditor, normally with cash, other financial assets, goods, or services; or
(b) is legally released from primary responsibility for the liability (or part of it) either by process of law or by the creditor. (if the debtor has given a guarantee this condition may still be met)
Due to non-payment of interest on a loan account, a bank has classified a company’s loan account as a Non-performing Asset and has stopped charging interest on such account. Whether non-recognition of interest in the books of the bank can be considered as an extinguishment of financial liability and the company shall discontinue the recognition of the accrual of interest expense while calculating the amortized cost of borrowing. To know the correct treatment under the company’s books.
Click Here To Read The Full Story
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
