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Interest bearing loan to related party abd Schedule III

Jayanta Bandyopadhyay (310 Points)

20 August 2024

Should we show interest bearing loan to related party in Balance sheet Schedule III under loans and advance .

Then applicable AS etc

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (5128 Points)
Replied 27 August 2024

Yes, an interest-bearing loan to a related party should be shown in the Balance Sheet under Schedule III, specifically in the "Loans and Advances" section. Here's how to report it: 1. _Loans and Advances_: Show the loan as a liability in the "Loans and Advances" section of the Balance Sheet. 2. _Related Party Disclosure_: Additionally, disclose the loan in the "Related Party Transactions" notes to the accounts, as per Accounting Standard (AS) 18. 3. _Interest Expense_: Report the interest expense on the loan in the Profit & Loss Account. Remember to comply with the applicable accounting standards and regulatory requirements.

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