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Articles tagged with: LOAN


[31 Oct 2010 | 2 Comments | 6,647 views]
Interest free loan with no fixed repayment terms

In June 2006, XYZ Co. obtained an interest free loan amounting to USD 50 million from a third party with no fixed repayment terms. Under the terms of the loan agreement, the loan is to be repaid in annual installments, each equal to 60% of X…


[21 Oct 2009 | 2 Comments | 7,797 views]

Can the arrangement fee (agengy fees, structuring fee and legal charges) paid to obtain a long term loan be deferred and subsequently amortised over the tenure of the Loan?
Kindly give references from IFRS.

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[15 Dec 2008 | No Comment | 4,820 views]

The Company has taken a loan for construction of projects. A part of
amount is kept in FD with the Bank. Interest is capitalized on the
amount paid as per payment certificates like draw down. If the project
is capitalized and 2 payment certificates received after the
capitalization date. Now question is whether interest will be
capitalized on amount paid after capitalization date or expensed out.

I think after the project is completed, the interest expenses, is charged to

Query is not clear:

1. If the loan was taken for construction, interest component to the date of capitalization …


[15 Dec 2008 | No Comment | 5,949 views]

Would you please explain me what is the difference between affiliates
and subsidaries, and then if there is any difference in accounting
treatments.( i am asking these question w.r.t an investment co.)
2nd thing is how i will treat the personal expenses of a partner which
are being paid by the co. and where i have to show it in the balance

Dear Hameed
The shares of subsidiary company should be owned by holding company
but for affiliates, the relationship is a connected party.
Thanks and regards

Dear Simon
Thanx for your reply, dear would you please explian me more, …


[15 Dec 2008 | No Comment | 2,063 views]

Dear all

My Company has an outstanding USD loan of say US$10m and as our main subsidiaries are operating in China and earns revenue denominated in RMB, which will ultimately flow to our company in terms of RMB dividend (converted to USD due to exchange regulation in PRC).
As we need to make periodic payments say US$1m every quarter, we are considering entering forex contracts to fix the USD/RMB rate that matches the payments (i.e. 10 contracts @US$1m each @ either same conversion price or different conversion price).
How should we disclose …


[14 Dec 2008 | No Comment | 858 views]

Dear All
Can any body tell me that is budget only for expenses or can be for Asset, liabilities and income also. My openion is it can be for all (Asset, liability, Expense and income). Please help me according to the IAS/IFRS.

Best regard…


[14 Dec 2008 | No Comment | 6,306 views]

Is there any guideline for measurement of loan impairment and recognition of interest income by using effective rate method


well Esther the UK leads the path i.e. the UK tax authorities are the only ones in Europe which accept IFRS reporting to the extent that its website http://www.hmrc.gov.uk/ does have a section allocated to differences between IFRS and UK GAAP
I wish in Germany they had the same thing!!!!!


Below is the list of applicable paragraphs from IAS 39 for measurement of loan impairment:

                 Financial assets carried at amortized cost

If there is objective evidence …


[14 Dec 2008 | One Comment | 2,364 views]

I am a Chartered Accountant in India and am interested in learning IFRS.
Can somebody tell me whether there is any institution through whom I can do some formal course like diploma on IFRS.
Else how does one upgrade himself to know more about IFRS.
This being one of the big oppurtunity to grab in India, I would like to learn about IFRS.


Dear Asif
Deloitte’s website has a proper training material which requires lots of data to be downloaded, but is very comprehensive.
I am sure it would help you.


Google IFRS, and you’ll find a lot …


[14 Dec 2008 | No Comment | 3,701 views]


Please let me know the salient points in IFRS 7 which has been recently been made a mandatory disclosure in the audited financial statements.

Under IFRS 7 there are 12 requirements:

Requirement 1


[28 Aug 2008 | No Comment | 5,207 views]
Waiver of Inter company Loan

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 loa…


[28 Aug 2008 | No Comment | 1,854 views]

Dear All,
Can Loan be classified as Available for sale investments (as it is open category). Please answer while considering IAS 39.

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[28 Aug 2008 | One Comment | 3,985 views]

As per the amended IAS 23, all borrowing costs on qualifying assets should be capitalised (no option to expense).
Does exchange differences on foreign currency loans qualify as borrowing costs to be capitalised?
Best regards

Hi Allan

To my understanding any positive/negative FX difference is expensed directly to the P&L.


The change to IAS23 will come into force on Jan 2009. So far that is only allowed alternative, the benchmark tre
atment is to expense.
The exchange differences on foreign currency should be included to assets under construction and therefore capitalised. After capitalisation of qualifying asset any exchange …


[28 Aug 2008 | No Comment | 2,832 views]

Dear All 
i am working in a home finance company which is subsidary of german company, due to which we are require to prepare the financial from IGAAP to IFRS.
i have the following questions:-
1.we take a loan and in taking loan that we usually pay a processing fee.
2. we pay security deposit for taking Building on rent.
3. we pay Fringe benefit tax on varoius items
i want to know,how the above mentioned items will be Accounted in Books in IFRS.
thanks in advance

Hi , I had read IAS 32-39 and if you like …


[28 Aug 2008 | No Comment | 1,744 views]

Dear Vatsla
can you answer my following question in details.
1. we take a loan  and pay processing fee for taking loan.
for eg. if we take a loan of rs 10 lacs , we generally pay processing fee of rs.50000. if you see the net amount in hand is rs 9.5 lacs
As per Indian Generally Accepted Accouting Prolices(IGAAP), we recognise the loan at rs. 10 lacs and rs 50000 is expensed off in the year in which loan is taken.
But in IFRS  treatment for this is different.  can you favour me to …


[28 Aug 2008 | No Comment | 2,752 views]

If an institution is recognizing income by using flat rate method, but IFRS requires to recognize by using effective rate method. My questions are:
a) policy remains but financial statements it should be based on effective rate. Is it?
b) How to convert portfolio by using effective rate.?

I don’t think so, see this link



Can anyone confirm if the PRC has officially transitioned to full IFRS GAAP reporting and if so, what was the effective date?  Are companies mandated to report in IFRS GAAP or can they still report in PRC GAAP up …


[28 Aug 2008 | No Comment | 3,622 views]

Dear all
Please help in deciding what items can be regarded as cash equivalents
Thanks in advance!

Cash equivalents are financial instruments that can be easily converted to cash, have high liquidity like stock of quoted companies.

Best Regards.


I woul suggest to take a look into IAS 7.6: Short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insgnificant risk of changes in value. Normally only an investment with a short maturity of three months or less from the date of acquisition.

It usually includes …


[28 Aug 2008 | No Comment | 1,882 views]

I have some clients asking for studies that show the cost of conversion to IFRS for companies that have been through this.  Does anyone know of resources for this?


and if anyone could link to any material about IFRS Conversion Project Management staff?

Hi Gord,
I don’t have info about it, but I would strongly recommend to include in the estimation the costs of following up on the quality of the conversion and further system modifications. Sometime those are bigger than the actual initial conversion costs.



This is a very difficult question to answer because …


[28 Aug 2008 | No Comment | 1,709 views]

Hi all,
I am bhenzer a neophyte in ifrs from Philippines. Can anyone please tell me how to journalize this.
My company obtained a loan in December 2007 in the amount of 20 Million to be amortized in 10 years beginning 2010 in 120 equal monthly installments. Interest from December 2007 to December 2009 shall be capitalized.
Kindly help me please.



You can apply IAs -23 borrowing cost

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[28 Aug 2008 | No Comment | 2,072 views]

Good day,
Could you tell how we record loans interest should I have provision then I amortize it on yearly basis or should I record the interest expense at the end of each year according to IAS what should I do.

Hi Amir,


First of all you need to make an estimation of what’s going to be the real lifetime of that contract which will be different than the nominal life. Then based on the net cashflows taking into consideration the original payment plan and any commissions/subventions, you have to recalculate the …


[27 Aug 2008 | No Comment | 1,671 views]

Dear All,

Our company has constructed a building which is to be our Head office. As part of improvements made on the buildings land, management decided to put up a garden with orchards and both Traditional and exotic trees. The garden is to beatify the environment as part of the environmental degradation measures and also enable the staff to go and relax. Out of the expenses so far incurred its felt we capitalize such expenses. I have gone thru the IAS 41 on agriculture where by they can be taken as …