accounting of import transaction
This query is : Resolved
03 April 2009
Dear Friends,
My company is importing raw material on LC 90 days.Payment is to be made on 90 days from shipping date. We have to book purchase on receipt of material. My question is that at what rate we should book the invoice which is in dollar.If we book it on current rate than difference will arise as payment is to be made after 90 days . How such transaction is to be accounted in books. Pls reply me on "rajeev20@hotmail.com"
My company is importing raw material on LC 90 days.Payment is to be made on 90 days from shipping date. We have to book purchase on receipt of material. My question is that at what rate we should book the invoice which is in dollar.If we book it on current rate than difference will arise as payment is to be made after 90 days . How such transaction is to be accounted in books. Pls reply me on "rajeev20@hotmail.com"
CA. B.SRINIVASULU
(Expert)
03 April 2009
The import transaction has to be entered into the books of account at the rate at which customs has cleared the goods. That will be the purcase price.
When you make a payment and if there is any difference - excess or short that should be accounted as loss or gain arising out of difference in foreign exchange.
When you make a payment and if there is any difference - excess or short that should be accounted as loss or gain arising out of difference in foreign exchange.
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