How to record post appointment intercompany loans

The journal entries that you process in the case of a company loan need to take into account the circumstances of the situation. You would need to have regard to the accounting standards and the particular circumstances.

This article suggests to record an asset in the paying company and a liability in the receiving company.

Some complications with inter-company loans are highlighted here:
https://www.accountingtools.com/articles/what-are-intercompany-loans.html.

We provided some instructions for the purposes of demonstrating how you may record these loans:

The entity providing the loan in cash

In this situation, Company A provides a cash loan to Company B.

To recording the loan:

1. In the Financials > Accounts, create a loan account as an Asset - Other Current Asset
   
   
   
   
2. Prepare a journal
   
   
   
   As the journal has a cash component it will appear in the R&P as a payment. The payment reports in the "Summary of Receipts and Payments in the F5602" under the category "Other Cost of Realisation".

Recording the repayment of the loan

When Company A receives the repayment of the loan, a receipt journal is recorded.

1. Record a cash receipt:
   
   
   
   As the journal has a cash component it will appear in the R&P as a receipt. The payment reports in the "Summary of Receipts and Payments in the F5602" under the category "Other Receipts".

The entity receiving the loan in cash

In this situation, Company B receives a cash loan from Company A.

Recording the receipt of a cash advance

1. Create a Liability Account to post the loan receipt to. The loan will be a liability to the company until it is repaid.
   
   
   
   
2. Prepare a receipt (Receive Payment) for the loan and post against the loan liability account
   
   
   
   The loan will not effect the Gross Assets Realised section of the F5602. It will report as a receipt against ASIC Category - Other Receipts in the Summary of Receipts and Payments.

Recording the repayment of the loan

When repaying the loan you can create a payment (Make Payment) against the liability account. The payment will report as a payment against ASIC Category - Other Cost of Realisation in F5602.