Accounting monograph on the novation of an unpaid bank loan

Company Y is a Romanian legal entity established according to Law no. 31/1990 on companies and profit tax payers. In 2012, it contracted a bank loan for a period of 5 years, amounting to 200,000 lei. Due to financial difficulties, in 2014, the company could not pay the bank installments. On July 30, 2015, the bank assigned the loan agreement to a company specialized in debt recovery, a Romanian legal entity, for the amount of 150,000 lei, concluding a novation contract in this regard.

 

According to Order 1802/2014, with the help of account 162 “Long-term bank loans” the record of long-term bank loans received by the entity is kept.

 

In the credit of account 162 “Long-term bank loans” are registered:

  • amount of long-term loans received (512)
  • unfavorable exchange rate differences resulting from the valuation at the end of the month, respectively at the end of the financial year, of foreign currency loans (665)În debitul contului 162

“Long-term bank loans” are registered:

  • amount of long-term loans repaid (512)
  • favorable exchange rate differences resulting from the valuation at the end of the month, respectively at the end of the financial year, of the loans in foreign currency, as well as on their repayment. (765)

In the company’s records, this credit is reflected in the balance of account 1622 “Long-term bank loans not repaid at maturity”.

The assignment only changes the legal entity that has the right to request reimbursement, so that no accounting record is required.

 

It is recommended to use an analytical account for the following accounting items:

 

581 “Internal transfers” = 1622 “Long-term bank loans not repaid at maturity” Bank -200,000 lei

581 “Internal transfers” = 1622 “Long-term bank loans not repaid at maturity” Z SRL 200,000 lei