As 11 - effects of changes in foreign exchange

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Sabareesh (Querist)
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11 May 2015 On March 31, as per the closing rate the following entry is passed since there is a gain.

Creditors a/c Dr
Exch diff a/c Cr

On 1st of April, the above entry has been reversed.
Effect: While making payments, exch diff is calculated between liability booking amount & payment amt but not b/w Mar 31st restated amount & payment amount.

Is it allowed as per AS 11?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 May 2015 No reversal is required for such liability. There will be a Dr in Exchange diff a/c due to reversal which will take care of the effect before 31st March. AS 11 is followed in passing the entries.

Sabareesh

Sabareesh (Querist)
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11 May 2015 Dear Seetharaman Sir,
I couldn't get u completely..In my case, the entry is reversed. Is it correct?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 May 2015 I already said no reversal is required.

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As 11 - effects of changes in foreign exchange

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