APPLICABILITY OF AS 11
This query is : Resolved
06 June 2011
We have purchased a capital goods from USA.
for i.e
Advance Made as on 1st December 2010
Receipt of Goods on port 20th February 2011
Clearance of Goods fro port 25th February 2011.
Invoice Date 1st January 2011
Invoice accounted on 31st March 2011.
Query :-
Which rate of exchange should i consider for capitalization of assets.
i.e. as on 1st December 2010 or 20th February 2011 or 25th February 2011 or 1st January 2011 or 31st March 2011.
How to give the accounting treatment of whole transaction??
for i.e
Advance Made as on 1st December 2010
Receipt of Goods on port 20th February 2011
Clearance of Goods fro port 25th February 2011.
Invoice Date 1st January 2011
Invoice accounted on 31st March 2011.
Query :-
Which rate of exchange should i consider for capitalization of assets.
i.e. as on 1st December 2010 or 20th February 2011 or 25th February 2011 or 1st January 2011 or 31st March 2011.
How to give the accounting treatment of whole transaction??
07 June 2011
As Per AS-11 Exchange rate should be on transaction date, when the goods are cleared then only you are said be received the goods hence it should be accounted on that date.
When you give the Advance account as per the rate as on that date, when you account the Asset on 25th February as on the date rate should be capitalized and Exchange fluctuation should be adjusted to Asset Account.
When you give the Advance account as per the rate as on that date, when you account the Asset on 25th February as on the date rate should be capitalized and Exchange fluctuation should be adjusted to Asset Account.
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