Uday Kanth (Consultant) (71 Points)
08 September 2009IAS 18 talks about revenue and it states, for Interest it should be recognised as follows.
Interest on time proportion basis that takes into account the effective yield.
Can some one please explain what does this mean?
1. Recognistion of interest on time proportion?
2. What is effective yield here?
regards
Uday Kanth
Uday Kanth
(Consultant)
(71 Points)
Replied 08 September 2009
Thanks for your response. Is this from the persepective of the person who is paying the interest or receiving the interest.
Why I am asking this :
When we say effective yield, its like I considering the exact inflow and outflow of cash because of the transaction and may also include any charges.
Eg: Loan interest agreed may be 12% per annum. If there is a fee component of say 1000/- for a loan of 100,000 for one year, effective yield for the lender is more than 12% considering the inflow of fee amount.
CA. Amit Daga
(Finance Controller CA. CS. CFA. CIFRS. M.COM. )
(9017 Points)
Replied 06 October 2009
just one correction mohan.. Revenue and income is not same..
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