As - 16 & as 11

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GAURAV JAIN

CHARTERED ACCOUNTANT

26 Points Posted on 07 June 2012

Dear Friends

I have a query on AS-11 and AS- 16

We have availed the INR loan for purchasing Fixed Assets from India. The loan was repayable in 60 monthly installments. To save interest cost, we have converted that INR loan into FCNR(B) loan from Bank after one year. All fixed Assets purchased were duly installed before conversion of that loan into FCNR(B) loan. That FCNR (B) loan is subject to roll-over in six months. That loan is also repayable in monthly installments denominated in USD.

My query is that whether that loan is Monetary Liability under AS 11. Whether, we required to re-state that loan at closing rate on 31st March and charge the gain/loss from Profit & Loss account.

As section 43A is not applicable in this case. The Assets was purchased from India and loan is availed in INR. Kindly guide us.

with regards

Replies (3)

Ashish

Accounting

48 Points Posted on 09 June 2012

I have same query for our External Commercial Borrowing which is repayable after 8 years in 3 monthly installments, should we need to restate ECB on 31 march

Sanjay Chauhan (IFRS)

IFRS

2369 Points Posted on 29 June 2012

All foreign currency monetary liabilities are to be restated at the balance sheet date as per AS 11.

CA Sachin Rastogi

Audit/IFRS Manager

264 Points Posted on 30 June 2012

Under international accounting standards it is prohibited to increase or decrease the cost of the asset due to the exchange gain or loss on remeasuring of monetary liabiliies at the reporting dates.

Thanks