Treatment of Bank Guarantee Charges

Page no : 2

Rajnikant Vadigoppula (CA, CS And CMA Final) (919 Points)
Replied 14 June 2011

it is deferred revenue expenditure amortised over a period of five years equally

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Krishna Srivastava (Professional Practice) (92 Points)
Replied 16 June 2011

Should be treated as revenue expenditure and to be charged in the same financial year.

Thanks

CA. K. K. Srivastava

kirti gupta (professional practice) (21 Points)
Replied 04 December 2014

charges or commission on bank guarantee should be treated as an revenue expenditure and charged in the year of guarantee secured as per AS 9 and if bank guarantee is taken for any capital expenditure then charges or commission on bank guarantee should be capitalized in the year of guarantee secured.