Pcfc loan

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Pushpak Lal

Student CA Final

286 Points Joined September 2014

Please advise the accounting treatment for PCFC - Our general way of business is - 1. WE avail PCFC Loan 2. Make Export 3. Submit the Invoice and other related documents to the same Bank 4. They discount it with corresponding interest on discounting. Should i close my export debtors on the day of submitting the bill to the PCFC Loan. Please suggest the complete accounting treatment.

Replies (4)

Himavanth K.S

Entrepreneur

142 Points Joined March 2009

Hi,

Hope this helps.

	PCFC Accounting - Sale made to a foreign Customer A in NY. Inv Value - 100 USD

1	On making the Export sales

	Customer A	100
	To Sales		100

2	On availaing PCFC loan against the Export sale invoice

	Bank"X"	90
	To PCFC loan		90

3	On receipt of money from Customer A

	Bank "X" A/c	100
	To Customer A		100

	PCFC Loan	90
	PCFC Interest	2.5
	To Bank		92.5

Regards

Himavanth

Venkateswaran Sundaram

4 Points Joined December 2017

What is the impact in Indian reupees

What exchange rate to be used in each of the above transactions as my base currency is INR

Venkateswaran Sundaram

4 Points Joined December 2017

how are the above accounted in INR as my base currency is INR

Himavanth K.S

Entrepreneur

142 Points Joined March 2009

Hi,

Use the RBI reference rate for converting the foreign currency into INR. Account the same. Any differences arising between the RBI rates and your bank rates should be considered as Bank charges.

Regards

Himavanth KS