As-2 & losson forign exch loss

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 January 2012 FACT:-
Assessee is doling bus of importing purchase.
can loss on a/c of payment to creditors of inventory be charged to costing to inventory?

please give explanation ?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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15 January 2012 As per AS-11, you have to report the creditors in Foreign currency into INR.
The rate to be taken will be the Closing Rate on the reporting date .. i e as on 31st March.
.
The difference if any arising due to change in exchange rate has to be shown in Exchange Rate Difference A/c.
.
The Inventory amount is not required to be changed. It is considered as non-monetary item and has to be shown at historical cost i.e.at the rates prevailing on the date of transaction.

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