How do I verify the Repayment of amount of foreign loan for purchase of an asset, as shown in the b…
How do I verify the Repayment of amount of foreign loan for purchase of an asset, as shown in the books of my client's company?
Chiranjibi Mar. 12, 2018
You can use the following list to verify the
- Check the loan agreement, rate of interest, terms of security.
- Check the remittances made during the year towards installments of repayments made.
- Check the receipted voucher/account confirmation for the balance of outstanding.
- The year end liability of foreign loan should be translated to the rate of exchange prevalent as on the closing date.
- The gain or loss arising on exchange conversion is to be credited or debited to Statement of Profit and Loss in accordance with the Accounting Standard 11.
- Check banker exchange rate chart for correctness of the conversion.
- Check RBI or other agencies’ permission for remittances outside India.
