As 11 - effects of changes in foreign exchange

Save Share

This query is : Resolved

Sabareesh (Querist)
Follow

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)
Follow

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)
Follow

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)
Follow

11 May 2015 I already said no reversal is required.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now