AS 11 Treatment
This query is : Resolved
16 July 2008
can u suggest me the accounting treatment for import purchases when the payment was made in advance
16 July 2008
lets take an example. you ordered goods worth $500.and you gave him advance of $200 and its inr value comes to rs.8500.
Ist entry is vendor a/c Dr.8500
to Bank a/c 8500
when goods come and you make final payment @rs.43.the entry would be vendor a/c dr. 12900, to bank a/c 12900.
now as er AS-11 , goods should be capitalised @ bill of entry rate lets say, Rs.44, then the accounting entry would be
goods a/c dr. Rs 22000(500*44)
to vendor a/c Rs.21400
to exchange fluctuation a/c 600.
this exchange fluctuation will go to P& L a/c at the end of the year. you can also refer my powerpoint presentation for more clarification. you will get the same in income tax files in this website or you can mail me at sachin.kataria@bankofamerica.com, i will send you from there
Ist entry is vendor a/c Dr.8500
to Bank a/c 8500
when goods come and you make final payment @rs.43.the entry would be vendor a/c dr. 12900, to bank a/c 12900.
now as er AS-11 , goods should be capitalised @ bill of entry rate lets say, Rs.44, then the accounting entry would be
goods a/c dr. Rs 22000(500*44)
to vendor a/c Rs.21400
to exchange fluctuation a/c 600.
this exchange fluctuation will go to P& L a/c at the end of the year. you can also refer my powerpoint presentation for more clarification. you will get the same in income tax files in this website or you can mail me at sachin.kataria@bankofamerica.com, i will send you from there
16 July 2008
more suggestions are welcomed
25 July 2008
I agree with your example sachin
You may further add that on balance sheet date of goods are not received you may have to restate the balance at balance sheet rate.
You may further add that on balance sheet date of goods are not received you may have to restate the balance at balance sheet rate.
05 October 2008
That is, the outstanding advances have to be restated at the rates prevailing on balancesheet date.
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