Hello Evry1
Can any1 please tell me what will be the accounting entries for hedging done to mitigate the risk of Exchange Rate Fluctuation on account of Export Of Goods.
Please reply fast its urgent.
Thanks in Advance
PRIYA GUPTA (ARTICLE) (114 Points)
06 October 2015Hello Evry1
Can any1 please tell me what will be the accounting entries for hedging done to mitigate the risk of Exchange Rate Fluctuation on account of Export Of Goods.
Please reply fast its urgent.
Thanks in Advance
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 06 October 2015
on entering into contract of hedging there is no entry but you have to amortise the premium difference in spot rate and hedge rate over the effective period
PRIYA GUPTA
(ARTICLE)
(114 Points)
Replied 06 October 2015
For that we need to pass an entry Sir...What that entry will be.
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 06 October 2015
when the bank debits the premium you pass entry as premium on hedging-receivables and credit bank
while amortising dr p&l credit premium on hedging till this premium is amortised
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