AS-11 breather

This query is : Resolved

Srinivasan (Querist)
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31 March 2009 There is a news item that AS-11 provision is deferred regarding MTM. Does this apply to only derivatives ? As per AS-11, all assets and liabilities in foreign currency as of year end are to be reinstated at spot rate as of year end rate. Does this undergo a change due to the news item ?

Ashish Aggarwal

Ashish Aggarwal (Expert)
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03 April 2009 As per new notification difference between any long term assets or liability foreign exchange gain or loss can be taken to “Foreign currency Monetary item Translation Difference Account”. However since derivatives are not covered any structured financial product may not come under this perview.

Srinivasan

Srinivasan (Querist)
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03 April 2009 Thanks. Since the amendment talks about " long term asset/ liability " amount lying in foreign currency in trade creditors/ debtors accounts have to be reinstated as per AS-11 as done hitherto .Is this correct ?

Srinivasan

Srinivasan (Querist)
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03 April 2009 The clarification on reinstatement to be done for balances in trade creditors /debtors , is sought for.

Ashish Aggarwal

Ashish Aggarwal (Expert)
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04 April 2009 Trade creditors and debtors are not long term assets or liabilities so as you rightly stated AS-11 will be followed as usual.

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