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int due but not paid

Radhika (CA Final) (194 Points)

05 May 2010

interest due for the last quarter(jan'10 to march'10) but not paid. where should this be disclosed as per schedule VI of Companies Act 1956?

Thanks & Regards

Rahika

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7 Replies

CS Mayur Buha (Company Secretary) (238 Points)
Replied 05 May 2010

Dear,

As per company law the Books of Account should be preapered on 'accrual' basis, so in this case also the Interest is being accrued so it would be disclosed in b/s.

Regards,

CS Mayur Buha

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(Guest)

If the loan is secured, show interest due but not paid under secured loans. If not, show under current liabilities and provisions.

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Jayesh (Internal Auditor) (214 Points)
Replied 05 May 2010

Dear Radhika, Interest due but not paid should be disclosed in the balance sheet as per schedule VI of the companies Act, 1956. As Mayur Sir has rightly pointed that books of accounts must follow accrual method of accounting. Regards, Jayesh

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Nitin Grover (CS) (1228 Points)
Replied 05 May 2010

Dear Radhika

It Will be included in Secured Loans not be shown separated

and in Annual Return in will be also shown as included amount where it required as total amount indebtness.

Regards

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(Guest)

There are two things.

Interest due but not paid is your liability. It should be credited to such loan account.

But interest accured but not due is not liability at present. But as per accural basis of accounting such interest should be provided in books. It will be shown as Interest accured but not due under current liability.

Interest accured but not due means,

suppose you have to pay interest half yearly that is June and december.

As for as 31st march is concern you would have paid interest till december. But interest for the period of jan, feb, and march will he paid in june. Now it is not your liability. So this interest will be shown in interest accured but not due.

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vikash rathi (Chartered Accountant) (787 Points)
Replied 06 May 2010

Originally posted by : Sathyanarayanan. CA Final
	There are two things. Interest due but not paid is your liability. It should be credited to such loan account. But interest accured but not due is not liability at present. But as per accural basis of accounting such interest should be provided in books. It will be shown as Interest accured but not due under current liability. Interest accured but not due means, suppose you have to pay interest half yearly that is June and december. As for as 31st march is concern you would have paid interest till december. But interest for the period of jan, feb, and march will he paid in june. Now it is not your liability. So this interest will be shown in interest accured but not due.