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Where to put loan write-offs on income statement?

Is a loan write off "other operating income"?

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A bank loan and an intercompany loan have been written off.  Should these both be put through the P&L as "other operating income" ... or something else?  I understand they will each have a different tax treatment.

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By johngroganjga
18th Oct 2019 22:01

You need to explain what you mean by “written off”.

Do you mean that the entity whose accounts you are asking about is insolvent, and its creditors do not expect to be paid, and have made adjustments in their own accounts to recognise that fact?

Or do you mean that its creditors have executed deeds of waiver to release the entity from its obligations to pay them? If so, why have they - especially the bank - done this?

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By pachira
19th Oct 2019 13:09

Hi John
The intercompany loan and part of the bank loan are being waived as part of a new share issue and investment agreement.
Thanks for your help.
Alex

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By johngroganjga
19th Oct 2019 13:28

Thank you for explaining.

It’s certainly not an “operating” anything.

It may be a financing something.

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By pachira
20th Oct 2019 13:58

Thanks for your help John.

Alex

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