Accounting Treatment of Bid Bond

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Please how do we treat Bid bond issued by the bank on behave of company B but guaranteed by company A for a proposed contract by D. All charges were paid by company A
 

kirby

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Please help others to help you. You need to define who "we" is: are you the Bank, are you Company A, are you Company B, are you Company D?????
 
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Kirby, sorry for the mix up. "WE" in the question refers to company A. company B is a coy that a director in Coy A is interested in. Coy D is the client
Thanks
 

kirby

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Looks to me that Co A now has a contingent liability. In US only need to disclose it unless Company B fails to perform. If so then Bank pays D and Bank can look to Co B or Co A (you) to get reimbursed.
 

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