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While doing debt equity test do we need to consider Trade payables and provisions for tax and other liabilities as debt ?

Pavan Kanavihalli

CA Final

★ 200

03-Jul-21 17:27

486

Answers (4)

Current portion of debt i.e debt due to be paid in next 1 year is shown as part of current liabilities - that amount would be added to non current portion of debt and the ratio is thereafter computed. Other current liabilities like Trade Payables etc. will not be taken as they are not Debt

Sahibdeep Singh

CA Inter

★ 14K+

03-Jul-21 19:26

Does It mean current portion debt also need to be included while doing debt equity test ? Sir

Thread Starter

Pavan Kanavihalli

CA Final

★ 200

03-Jul-21 23:35

Thread Starter

Pavan Kanavihalli

Does It mean current portion debt also need to be included while doing debt equity test ? Sir

Yes

CA Suraj Lakhotia

Admin

04-Jul-21 06:45

Thank you sir

Thread Starter

Pavan Kanavihalli

CA Final

★ 200

04-Jul-21 19:18