Accounting of interest income

ancy (article) (94 Points)

23 October 2011  

A company had calculated interest accrued but not due on their fixed deposit  as on 31-3-2010.

However, the company before approval of accounts made a pre-mature withdrawal of the FD. As a result the company had to bear loss of interest.

Suppose, interest accrued but not due accounted is Rs. 7 crore.

but on pre mature withdrawal they received only rs. 5 crore.

should the proportionate  reduction in interest income be shown in accounts considering the effect of AS 4-events occuring after balance sheet date and AS -9 revenue recognition(i.ei income should be realizable or realized). if yes, then how? because i have never heard of provision for interest accrued.