Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Accounting for sale of share in foreign currency

11 February 2024

I have purchased some share eg. For eur 100 in foreign currency eur on 31 December 2021 and recorded the same at the rate on date of 31 December. Now I have sold the shares for eur 200 and I need to record the entry in books of account. I have not converted the currency in INR. Will I be recording the sale at the rate of date of transaction and record the exchange gain loss on sale of share?If not will everything will be treated as only gain on sale of share?

Reply
Follow
Share

7 Replies

sabyasachi mukherjee (26207 Points)
Replied 11 February 2024

There
need to be two sets of books
1. shares in foreign exchange
2. inr
profit loss to be calculated

tanishq gupta (5 Points)
Replied 11 February 2024

Why two sets of books? I am preparing the accounts for the company in INR and I need to give effect to transactions.

Yasaswi Gomes new (Finance ) (4487 Points)
Replied 11 February 2024

Ok not bad! When you purchased you'll record it translated. When you sold it, you'll record it translated. Gain is translated as well.

tanishq gupta (5 Points)
Replied 11 February 2024

Thanks yashaswi. That means the exchange loss / gain will be unrealised or you mean full gain based on translated rates will be gain on sale of share.