AS- 11
This query is : Resolved
Mohit Gupta
(Querist)
15 February 2011
I have a debtors of Rs. 100 and for hedging this i took a forward contract of Rs. 150 due to transaction in normal course f business.
So wat will be treatment as per AS-11 on year end in books of A/c??
So wat will be treatment as per AS-11 on year end in books of A/c??
sandesh mundra
(Expert)
16 February 2011
As per AS-11, Forward Contracts need to be accounted for as below:-
Spot rate - Rs.130 + Premium Rs.20 = Rs.150
Premium has to be amortised over the period of the contract
At year end you may compare the closing exchange rate which is lets say 140.
You then need to book a loss of Rs.40 on current liability and gain of Rs.30 on Forward contract
Spot rate - Rs.130 + Premium Rs.20 = Rs.150
Premium has to be amortised over the period of the contract
At year end you may compare the closing exchange rate which is lets say 140.
You then need to book a loss of Rs.40 on current liability and gain of Rs.30 on Forward contract
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