Accounting entry

In such a case generally we are trated as unsecured creditor and debtors.

So,

01. In the Books of you, accouting entry would be :

Cash a/c                                                                                  Dr

    To Xyz a/c (Name of person who giving you money)

(Being unsecured loan taken from Mr Xyz)

02.  In the Books of other Party , accouting entry would be :

Your Name a/c                                                                        Dr

    To Cash a/c

(Being unsecured loan given to ABC.)

I hope I understood your question and answer it..

In such a case generally we are trated as unsecured credir and debtors.

So,

01. In the Books of you, accouting entry would be :

Cash a/c                                                                                  Dr

    To Xyz a/c (Name of person who giving you money)

(Being unsecured loan taken from Mr Xyz)

02.  In the Books of other Party , accouting entry would be :

Your Name a/c                                                                        Dr

    To Cash a/c

(Being unsecured loan given to ABC.)

I hope I understood your question and answer it..

I think this is a non-compete fees. 

The recepient of the non-compete fees will have to book it as business income or income from other sources. And the person paying it may treat it as expense deductible.

Wait for more replies.

oopss ! Sorry I was not understand your question. Now I got your point.

01. If this amount is not a big (Materility concept) then you can directly charge to your P & L Income as Misc. Income.

Entry would be..

Cash a/c              Dr

   To Misc Income

02. You can also treat this income as settlement income or Remuneration income or as Good will or Royalty. These all are oprions available for you. This looks for comfortable and particular then only Misc. Income.

Dear Govind

The income should be spread over period treated as capital receipt in your books of a/c and

capital expenses in giver's books of a/c.

AS 9 "Revenue Recognition" applies.

Period can be minimum 3 to 5 years.

thanks