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ACCOUNTS
II. Functioning of accounts
Class 1. Equity and liabilities

16. Loans and similar debts

 

Account 16 " Loans and similar debts " records both loans and financial debts similar to loans, with the exception of those recorded in account 17 " Debts related to equity interests " .

Accounts 161 " Convertible debenture loans ", 163 " Other debenture loans " , 164 " Loans from lending institutions " , 165 " Deposits and sureties received " , 166 " Employee profit-sharing " , 167 " Loans and debts with special conditions " and 168 " Other loans and similar debts " may be subdivided to identify:

  • loans and similar debts contracted in France and abroad, in domestic or foreign currency;

  • the part of loans and similar debts with long-term, medium-term or short-term maturities.

Accrued interest on loans and debts is recorded in a subdivision of account 168.

Entities may also subdivide loan accounts to identify loans from affiliated entities or equity related entities.

Debenture loans with redemption premiums are credited to accounts 161 or 163 for their total value, including redemption premiums. The counterpart of these premiums is recorded as a debit to account 169 " Debenture redemption premiums " .

The current financial year's expense is recorded by debiting account 6861 " Amortizaton expenses of debenture redemption premiums " to account 169.

On subscription, the issuer of bonds with bond warrants records the debenture loan in account 163 " Other debenture loans " for its redemption value. The difference between the redemption value and the actual value of the loan is recorded in account 169 " Debenture redemption premiums " .

The difference between the issue price of the bonds with bond warrants and the actual value of the bonds is recorded as deferred income for the bonds.

In the case of bonds with share warrants, the debenture loan is accounted for in accordance with general rules. The counterpart of the warrants is not recognized.

Short term bank advances are not recorded in account 164 " Loans from lending institutions " . They are recorded in a specific account: 519 " Short term bank advances " .

Account 166 " Employee profit sharing " records unused funds and amounts relating to the creation of a profit sharing fund. The subdivision of account 166 entitled " Blocked accounts " is credited by debiting account 424 " Employee profit-sharing " with the amount of funds that could not be used due to the absence of agreement between employers and employees.

Account 167 includes loans and debts with special conditions. The amount of non-voting shares issued is recorded in account 1671. Advances by the state subject to conditions are recorded in account 1674. Profit-sharing loans are recorded in account 1675.

The account 1685 " Capitalized life annuities " records to its credit the counterpart of the movable or immovable property acquired against payment of life annuities. It is cleared by the payment of the arrears to the creditor.

Arrears payable in excess of the principal are credited to account 1685 and constitute an exceptional expense. Conversely, the death of the annuitant may be a source of exceptional income.

 

 
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