Bank guarantee accounting treatment
This query is : Open
Querist : Anonymous
Querist :
Anonymous
(Querist)
21 August 2011
a person has taken financial bank guarantee which he has given for taking some contracts.
what will be the accounting treatment of it.
what will be the accounting treatment of it.
21 August 2011
1. Bank Guarantee charges are to be written
off to Profit and Loss account on
mercantile basis.
2. The amount of expenses paid for a period
falling in the next accounting year may
be treated as Prepaid Expenses.
3. Bank Guarantee is a Non funded facility
and the same may be invoked on the
happening of certain event, as such, it
is contingent in nature. A note should
appear under the head 'Contingent
Liabilities' giving the details and the
maximum amount involved.
Hope query resolved.
Now Cheers
off to Profit and Loss account on
mercantile basis.
2. The amount of expenses paid for a period
falling in the next accounting year may
be treated as Prepaid Expenses.
3. Bank Guarantee is a Non funded facility
and the same may be invoked on the
happening of certain event, as such, it
is contingent in nature. A note should
appear under the head 'Contingent
Liabilities' giving the details and the
maximum amount involved.
Hope query resolved.
Now Cheers
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 September 2011
tanks sir,
I have one more query in this issue
Person A taken a bank guarantee on FDR / property of person B for giving it to a govt. department.
What will be accounting treatment in this case.
KINDLY REPLY
I have one more query in this issue
Person A taken a bank guarantee on FDR / property of person B for giving it to a govt. department.
What will be accounting treatment in this case.
KINDLY REPLY
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