Disclosure for loans with personal guarantee

CA Sachin Rastogi (Audit/IFRS Manager) (338 Points)

10 August 2011  

When a parent guarantees a bank loan taken by his susbidiary then can such loan be treated as secured loan in the financial statements of subsidiary. Basically, can a personal guarantee given for a loan  make it a secured loan in the books of borrower. Does secured loan necessarily means to be secured by tangible assets only or even a personal guarantee can be considered as a security for such loan taken from the bank.

Thanks

 

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