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Waiver of Inter company Loan

28 August 2008 2,255 views No Comment
Please let me know the treatment of Inter company loan waiver.Example 

Company A is fellow subsidiary of company B.

And company B has given loan to company A for $ 10,000 and there is accrued interest of $ 1000 on loan.

Now Company B waive off all loans and interest.

Under IFRS it should be charged to P& L or equity?

Regards,

Hello,

 

It should be charged to to P&L, as revenue. Essentially, the company received some cash for free; that’s revenue.

Regards,

While preparing the stand alone books of Company A and B, it should be charged to P&L account.

 
but at the time of consolidation, both the entry will be knocked off and no impact on the consolidated financials.
 
best regards

 

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