As-11 urgent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 April 2012 is there any provision in AS-11 which says that a company can capitalize the loss on account of revaluation of term loan,(loan taken in foreign exchange)due to change in foreign exchange rates

if there is a provision for the same than what are the requirements for the same.

CA Kishore Tallam

CA Kishore Tallam (Expert)
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20 April 2012 Till FY 2010-11, there is such provision but not as per AS 11 but as per notification given by the MCA. U can capitalise the currency fluctuations on such borrowings. But u need to disclose the same in ur notes to accounts.

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Querist : Anonymous

Querist : Anonymous (Querist)

20 April 2012 but sir is this provision still in place ?
because it is written in revise schedule 6 that if there is any diffrence between schedule 6 and AS/Companies Act then AS/Companies Act prevails.

so now can we still capitalize the loss on A/c of term loan due to Forex rates in FY 11-12.

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Querist : Anonymous

Querist : Anonymous (Querist)

20 April 2012 sir pls reply fast.

CA Kishore Tallam

CA Kishore Tallam (Expert)
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20 April 2012 Pls see my previous reply. I said till 2010-11 that provision is there. After revised sch Vi is in picture, since standards prevail, that provision will not be applicable.

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Querist : Anonymous

Querist : Anonymous (Querist)

20 April 2012 thanks a lot for instant replies. :)

Querist : Anonymous

Querist : Anonymous (Querist)

20 April 2012 sir can u pls provide me the mca's notification's details.
even the year will do.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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20 April 2012 Please see The Companies (Accounting Standards) (Second Amendment) Rules ,2011 dated 29/12/2011. Can be followed even after Financial year 2010-11.

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CA Kishore Tallam

CA Kishore Tallam (Expert)
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20 April 2012 Dear Sir,
As per Companies As Amendment rules, this provision will not be extended beyond March 31, 2012. Hence, this provision is no more in force.

Querist : Anonymous

Querist : Anonymous (Querist)

20 April 2012 finally for Financial year 11-12 a company can capitalize the loss due to exch. rate.

thank u...

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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20 April 2012 Kishore Ji

Cut off date is 31/3/2020. Please see notification in http://mca.gov.in/Ministry/notification/pdf/Companies_Amendment_GSR_913E_2011.pdf

CA Kishore Tallam

CA Kishore Tallam (Expert)
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20 April 2012 Dear Sir,
Agree with u. Thanks for the information. It is till March 31, 2020. This prevails over AS 11.

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