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Calculation of Foreign Exchange Gain on Bills Discounted

Manoj (CA Final) (56 Points)

24 August 2021

Hi,

I have discounted following exports invoice from HDFC Bank, please suggest the calculation of foreign exchange gain and entries in tally.

	Euro	Euro Rate	Amount Rs.	Date
Invoice Value booked in Tally	21060	84.55	1780623	01-04-2021

Discounting Value credited to C/A	21060	92.35	1944891	22-04-2021

Received by bank from Client	21060	89.1479	1877455	19-05-2021

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4 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 24 August 2021

Create a ledger FOREX GAIN & LOSS under Indirect Expenses
Gateway of Tally >> Accounting Info >> Voucher Type >> Alter >> Journal >> Name of class. specify a name say 'Forex '.
In the sub-screen, Use Forex Gain/Loss adjustments = yes >> select the Forex gain & loss ledger and accept.
To adjust the unadjusted forex gain/loss in balance sheet, pass a journal entry.
Dr Party, Cr FOREX GAIN & LOSS
And select the Bill References.
Accept the voucher to remove unadjusted forex gain loss

if it is sales, you will record gain. Discounting means bank charges? If so expense them.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 24 August 2021

No one more thing I forgot to mention, revaluations take place on every transaction. What is finalised by the year end must be treated to revaluation reserves accordingly as per as 10 revaluations, 1944891 is the year end, then that is revaluation for the year end. The last gain will be recorded in the next year. I hope you got it.