is intercompany transaction permitted?
can we show it as unsec loan?
for what period?
Yamini Swarnalatha
(Chartered Accountant)
(112 Points)
Replied 11 November 2011
intercompany transactions are permitted, you only need to verify whether the contracts/ transactions take place at the prevailing market rates, so that no related party is taking undue advantage on your company, of the same.
if you are treating it as unsecured loan from related party, show it in balance sheet as follows:-
"Unsecured Loans:-
Unsecured loan (comprises of loan from directors and shareholders and ICDs)"
[ICD means intercorporate deposits]
as far I know, no restriction on period is there.
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