Accounting of exchange loss
This query is : Resolved
23 July 2012
I am an Indian Company is receivable of foreign currency for sale of services. My sister concern received the money on behalf of me. While making journal as giving effect to debtors and sister concern should I account exchange loss (as invoice ate and today's rate are different)
24 July 2012
The Indian Company will have to account for exchange fluctuation till it receives the money.
If the money is received by a sister concern in India, then it should close the receivable account by booking exchange fluctuation till the date of receipt by sister concern.
At the same time, debit the sister concern for receipt of that money. The sister concern balance will thus be a new receivable in INR and thus there will be no exchange fluctuation on it.
If the money is received by a sister concern in India, then it should close the receivable account by booking exchange fluctuation till the date of receipt by sister concern.
At the same time, debit the sister concern for receipt of that money. The sister concern balance will thus be a new receivable in INR and thus there will be no exchange fluctuation on it.
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