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ACCRUED INTEREST

27 July 2019

Accrued interest was not booked at the end of the financial year but instead interests amount was added to fdr value.Hence in balance sheet no accrued interest is shown.Is this violation against any act?If yes under which one? or Is this treatment right since the net effect of value of fdr at maturity value would be same

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (168971 Points)
Replied 27 July 2019

What is meaning of accrued?

Even though it may not have been received in cash, but your FD value remains same?

If no, how can your BS be correct?

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gayathri maruwada (85 Points)
Replied 27 July 2019

accumulated over a period of time

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (168971 Points)
Replied 27 July 2019

So, the interest is accrued every quarterly to FD, thereby increasing the value of FD, and as such you have to offer the accrued interest in ITR. To that extent the principal amount of FD will increase in assets side of BS.