My client has taken INR-USD swap for INR Loan from Indian bank for term loan. The term loan is for capex. The bank is sending MTM Loss statement on a daily basis. For the qtr ended Rs. 50 lacs. Should i recognise this loss as MTM in P&L? What is the AS to be followed. Is it AS 30, 31, 32 or AS11.If i follow AS11, since this loan is for capex, can i adjust Loss/profit in the carrying amount of Fixed assets.
11 May 2011
As per AS 30-32 you need to post the MTM to P&L is you are not following Hedge Accounting.
If you follow HA, you can recognize the MTM changes to OCI and once the capex project is over you can recognize the change as part of Carrying Amount of Fixed Asset.
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