Definition of smc as per accounting standards

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Hi all!

I am having a query regarding meaning of the term "borrowings" in the definition of Small and Medium sized companies. Does it include Unsecured Loans, Overdraft, CC, Term Loans, LC, BG? Also, whether it considers sanctioned amount of loan or amount on day to day basis? 

Replies (2)

Dear Parnika,

The term borrowing is not defined in accounting standards as well as on guidance note to terms used in financial statements.

Thus I think we can understand this term based on the usage of the terminology borrowing in Schedule VI.

In my view out of the items listed by you apart from LC and BG all other items will be considered as borrowings. 

You should consider only the utlized amount for computation of borrowing and not the sanctioned amount.

 

Thanks :-)


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