what is intercorporate deposits? what are its merits & demerits?

A business which has more profits than its need give short term loans to other businesses, this is called ICD or Inter Corporate Deposits.

MERITS

• No advertisement of financial status is to be made all the things are done confidentially.
• It helps in maintaining relations with other businesses which can be beneficial in future.

DEMERITS

• They are the Borrowed funds i.e. they are the burden on the business.
• They are not suitable for long term as they are short term loans.
• A fixed amount of interest is charged by the giver.
• It creates charge on the assets.