11 August 2008
hello experts i am doing audit of a listed concern which has been declared sick by BIFR it had issued rs.4 cr debentures earlier n now due to non payment of int,n principal amount it gone for OTS(one time settlement) and has written back the balance amount as income of the previous year now my quest.is if co.used the principal amt.against purchase of fixed assets and now when it is writing off both int n principal amt,will it have to adjust principal amt.against fixed assets n capital will come or writting off full amtas b.income is correct plz refer section also thankx
20 August 2008
No. You can not adjust the waived amount of debenture against the fixed asset. The waiver amount represents capital receipt and should be accounted as such.
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