Lc margin

MURALIDHARA ADIGA (GENERAL MANAGER ACCOUNTS)   (26 Points)

05 March 2014  

Dear Sir,

I have negotiated letter of Credit to the extent of Rs 30 Crores. The bank has taken 10% margin from my CC amounting to Rs 3 Crores. 

In balance sheet above will appear as below

Liabilities                                                Asset

Letter of Credit             30.00                   FD agst LC 3

or

Liablities

Letter of Credit net of

Margin                        27.00    

Which presentation is correct as per AS

Please let me know.

Thanks & Regards,

Murli