Foreign exchange loss
TRIPTI NEGI (accountant) (31 Points)
04 May 2016TRIPTI NEGI (accountant) (31 Points)
04 May 2016
Sandeep Garg
(Consolidation and IndAS Application)
(1056 Points)
Replied 04 May 2016
For increase in forex rate, entry would be -
Forex Loss (PL) Dr.
Creditors Cr.
For decrease in forex rate, reverse entry will be passed
TRIPTI NEGI
(accountant)
(31 Points)
Replied 04 May 2016
sir
it increases our creditor balance . hopw to adjust
Sandeep Garg
(Consolidation and IndAS Application)
(1056 Points)
Replied 04 May 2016
Pls provide complete details.
If the forex rate has increased, you need to pay more in INR terms but in foreign currency terms it will be same.
TRIPTI NEGI
(accountant)
(31 Points)
Replied 04 May 2016
loss in fluctuation inr 15000 dr
to abc .......... inr 15000 cr
Sandeep Garg
(Consolidation and IndAS Application)
(1056 Points)
Replied 04 May 2016
Tripta...lets say amount payable is USD 10,000.
Exchange rate at the time of bill booking is 66 and now it is 68.
You will book a loss of 10000 X 2 = 20000 Rs.
And increase creditors in INR terms by Rs. 20000
You need to pay only USD 10000 at the time of payment
Lets say u make the payment at rate of 69
Then you will again book a loss of 10000 X ( 69 - 68 )
Increase creditors by 10000X 1 = 10000 Rs.
And will show the payment of 10000 * 69 = Rs 69000
In this way your creditor will be zero
Hope this clarifies.