banner_ad

Accounting treatment of foreign exchange loss on machinery

This query is : Resolved 
Profile Image

Profile Image

(Querist)
16 September 2013 On of my client places an order for Machinery when USD rate was INR48.
Payment terms were 30% after receipt of proforma invoice, 60% after 2 months and remaining 10% when Container is unloaded in India.
My client made payments accordingly and the rate increased at each of the payment compared to INR 48 = USD 1.
I know that after 31.3.2011, any kind of Foreign exchange loss in debited to P&L A/c. by Foreign Exchange Translation Loss.
But, here the commercial invoice is not received by my client when he made payments and he got possession of machinery only after he made all the payment.
Does he need to recognize the loss in P&L A/c. or he can add to the Fixed Assets cost of the Machinery?

Thank you in advance..
Profile Image

Ganeshbabu K

Profile Image

Ganeshbabu K (Expert)
23 September 2013 forex loss/gain on fixed assets should be capitalised,,it cannot be recognised in profit and loss account
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now


CCI Pro
Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!


Similar Resolved Queries


loading


Unanswered Queries


banner

Trending Online Classes

view all classess

CCI Pro
Meet our CAclubindia PRO Members
Subscribe Now

Follow us
add to google news


Answer Query



Quick Links



Browse by Category




Latest Job Openings

View all
Company
19 May 2026
Accountant

ca kunjan

Mumbai

CA Inter

View Details
Company
Featured 28 May 2026
SEMI QUALIFIED/ CA DROPOUTS/ ARTICLES

T R SOOD & CO

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 15 May 2026
Audit Assistant / Article Trainee / Intern

SSGS and Associates

Chennai

CA Inter

View Details
Company
10 June 2026
Senior Account Executive

JDS Advisory LLP

Ahmedabad

CA Inter

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
ARTICLESHIP 31 May 2026
Article Assistant

KPRS And Associates

New Delhi

CA Inter

View Details
Company
14 May 2026
Senior Associate

ABHISHEK SHANKAR AGARWAL & ASSOCIATES

Kolkata

CA

View Details
Company
29 May 2026
Finance Head

Bhawar Sales Corporation

Chennai

Graduate (Any)

View Details