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Dear Accounting Professional, If loan receivable is for

Dear Accounting Professional, If loan receivable...
Dear Accounting Professional,

If loan receivable is for related party, should it be considered as equity or still should be considered as assets?

Please advise, thanks!
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Answered in 5 minutes by:
5/17/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,593
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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MyVirtualCPA : Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.
MyVirtualCPA : A loan receivable to a related party is still an asset
MyVirtualCPA : It is not equity
MyVirtualCPA : Is there anything else I can help you with today? If not please rate my response as "excellent' so that I may receive credit for assisting you today
Customer: Thanks, XXXXX XXXXX please mind to help me find a source information? Because I really need it as a reference, so I could convince the other party. I tried research but couldn't find one. However, I do think it is considered as asset instead of equity.
MyVirtualCPA : It's called a receivable ... receivables are always assets
Customer: No, there is an account called subscription receivable, that is considered in equity section...
MyVirtualCPA : This is not equity though
Customer: subscription receivable means stocks are issued exchange with cash, but the company not yet received cash yet..
MyVirtualCPA : That's different as it deals with stock
MyVirtualCPA : Loan receivables from related parties are assets - they have nothing to do with stocks or equity
Customer: Yes, agreed...but are there any source document that I could refer as well?
MyVirtualCPA : There's no source...it's common knowledge
Customer: I see, thanks!
MyVirtualCPA : You're welcome is there anything else I can assist you with today?
Customer: That's all my questions, thanks!
MyVirtualCPA : You're welcome
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,593
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
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Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,593
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