Non-Market Rate Loans Query

Do you treat non-market rate loans as financial instruments or current assets?

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*Non-Market Rate Loans Query*

Do you treat non-market rate loans (intra-company or director) as financial instruments under FRS 102 and charge 'market-rate' interest?


Do you treat non-market rate loans as current assets under FRS 102, and ignore 'market-rate' interest charges?

I've been treating them as financial instruments (if the balance fluctuates but generally behaves like a loan) but am talking to more accountants who ignore them and don't charge the interest at all by classifying the loan as a current asset.

This AW article also suggests that in practice - some loans are treated as current assets rather than loans.

Interested to see what other people do.



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By johngroganjga
29th Sep 2018 16:04

I think you should be focusing on the basis of valuation of them, rather than where they appear in the balance sheet. You do remember don’t you that being repayable on demand trumps everything, which is probably the case with 99% of intra-group and director loans?

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