Please let me know how the interest accrued on loans is treated in the accounts Expecialy whetyher the interest accrues on loans which gas become NPA Should be shown in balance sheet
2 Replies
GAUTAM SHARMA
(Audit Assistant)
(353 Points)
Replied 05 June 2013
| Originally posted by : oasis | ||
 |
Please let me know how the interest accrued on loans is treated in the accounts Expecialy whetyher the interest accrues on loans which gas become NPA Should be shown in balance sheet |
 |
interest on NPA should be recognised on cash basis ,so question arises on its accrual treatment
Debit the bank Account And Credit the interest on loan account
veeru sagar
(BBE,M.com,CA Final )
(468 Points)
Replied 06 June 2013
the loan assets of bank are 2 types
(1) NPA( non-performing assets)
(2) PA (Performing Assets)
Interst earned on the PA can take into P&L A/c (Cash & Accrual basis)
but interest earned on the NPA can take into account only on the receipt basis means cash basis
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