Afsal CP (Article Trainee) (44 Points)
11 August 2014Dear all, one of my client imported goods from abroad after making 100% advance payments. for that case we reinstated the forex differences and gain amount showed seperately in profit and loss account. now stat. auditors adjusted forex gain with purchase cost. his clarification that for 100% advance payment, reinstatement is not required.
can any one help me for this matter.
CA. Mayur
(Service)
(147 Points)
Replied 12 August 2014
As per AS 11“Monetary Items” are defined as money held and assets and liabilities to be received or paid in fixed or determinable amounts of money. In your given case since the payments made are regarded as prepayments or as progress payments therefore the amounts would be treated as non-monetary items and not required restated at reporting date. Therefore in my view auditor contention is valid.
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