siva thunder (article student) (253 Points)
05 March 2014If export sales are made on 01st march and the proceeds of sales are received on 20th march but due to unfavorable rate the proceeds are not converted into domestic currency on that rate and it was converted on 20 April ,than in that case what is the accounting treatment on 31st march & on 20April ?? the exchange rates are 50(date of sales),45(date of receipt) 48(On balance sheet date) & 49(on converted rate)
MANJULA
(Article assisstant)
(103 Points)
Replied 05 March 2014
The Accounting Treatment on 31st March: The stock received will be shown in the Notes to Accounts regarding its receipt and non-payment.
The Accounting Treatment on the date of Conversion/payment the amount paid is being recognised
siva thunder
(article student)
(253 Points)
Replied 06 March 2014
dear manjula
we are exporter and i want to know treatment of foreign currecy fluctations
MANJULA
(Article assisstant)
(103 Points)
Replied 06 March 2014
The Exchange Difference arising out of Foreign Rate Fluctation shall be recognised in the reporting period as Profit/Loss arising due to Exchange Difference in the Profit and Loss A/c
siva thunder
(article student)
(253 Points)
Replied 06 March 2014
dear
could you quantify that by the example i coded
MANJULA
(Article assisstant)
(103 Points)
Replied 09 March 2014
It shall be treated as follows:
On the Balance Sheet Date a Notes to Accounts shall be made as the Sale i.e., disposal of stock is made on 1st March and the stock is being sent on 20th March but the payment has not been made due to unfavourable fluctuation.
On the date of transaction the sales shall be entered at Rs.49 per currency as only such amount is being realised against its sale.
(or)
the sales made can be debited with the debtor and on the date of payment made the difference can be represented as exchange loss i.e., Rs.1 per currency. Sorry for the delay
sourav
(Specialist)
(21 Points)
Replied 10 March 2014
Dear All,
Greetings of the day. My question is if an import or export proceed is backed by a forward contract and the contract is utilised on the due time with the underlying sale or purchase is there any profit or loss even if rupee is appreciated or depreciated. please clarify with an example. As per my thought the profit or loss is notional as this is why forwards are preferred.
Regards,
Sourav
7838383576
Arif Ali
(Apt Co Advisory)
(1230 Points)
Replied 10 March 2014
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