Sometimes, part of goods being consigned may be lost/destroyed or damaged either in transit or in the consignee’s warehouse. Such loss can be either normal loss or abnormal loss.

This article discuss what are these losses and their respective accounting treatment in consignment accounting.

This article looks at the type of additional commission given by consignor to consignee and the purpose(s) of giving such incentives/commissions.

Part 1: How Goodwill arises and the definition of Goodwill

Part 2: Factors affecting Goodwill & Various Method of Goodwill Valuation

Part 3: Valuation of Goodwill On Entry Of New Partner or Retirement of Old Partner

Part 4: Valuation of Goodwill by the Arbitrary Assessment Method

Part 5: Valuation Of Goodwill by the Capitalization of Expected Future Net profits

Content Page:

Reasons For Capital Reduction And Its Accounting Treatment

A basic understanding of Capital Reconstruction/Reorganization

Part1: What is Company Reconstruction

Part 2:Internal Company Reconstruction –Capital Reduction By The Return of Surplus Capital to the shareholders

Part 3:Internal Company Reconstruction-Capital Reduction Where Capital Is Not Represented By Available Assets

Part 4:Accounting entries used in capital reduction where capital is not represented by available assets

Bank Negara yesterday has announced the relaxation of foreign currency rules on the amount of borrowings by local companies and individuals as part of efforts to enchance Malaysia’s competitiveness. 

Details:

• A resident or local company was free to borrow any amount in foreign currency from its non-resident non-bank parent company, other resident companies within the same corporate group in Malaysia and licensed onshore banks.
• Companies could now obtain any amount of foreign currency supplier’s credit to buy capital goods from global suppliers.
• Removal of  the thresholds on foreign currency borrowing of RM100mil in aggregate by a resident company on a corporate group basis and RM10mil for a resident individual, On borrowing in ringgit by residents from non-residents, the central bank said a resident company was allowed to borrow any amount of ringgit from its non-resident non-bank parent company to finance activities in the real sector in Malaysia and up to RM1mil in aggregate from other non-resident non-bank companies and individuals for domestic use.
• A resident individual, was allowed to borrow up to RM1mil from non-resident non-bank companies and individuals for use in Malaysia.
• Note that borrowing of any amount from non-residents previously required permission of the Controller of Foreign Exchange.
• In terms of lending in ringgit by residents to non-residents, a resident company or individual is free to lend in ringgit any amount to non-resident non-bank companies and individuals to finance activities in Malaysia’s real sector. Previously, only up to RM10,000 was allowed.
• A licensed onshore bank is now free to lend any amount in ringgit to non-resident non-bank companies and individuals to finance activities in the real sector against up to RM10mil previously. 

Experts believed that the following benefits should be achieved:

• Facilitate greater access to financing,reduce the cost of doing business and is a step forward for businesses ‘financing activities”
• It will increase the financing efficiency of companies as they are no longer that restricted by rules and are able to enjoy flexibility to match their financing needs.
• For banks, this is also a great boost to the level of banking activities as we can now lend in multi-currencies,.
• Both local firms and foreign firms with subsidiaries here will be able to reap the benefits and be more competitive as a result.