wat is d treatment of preliminary expenses according to revised schedule VI in Balance Sheet????

direct meterial purchased from outside India.Exchange loss or gain relating to those purchases directly reduced or added to purchases .Above treatment done by one company the treatment correct or not as per companies act?please tell me treatment of exchange loss or gain as per companies act? what affect of incometax?

Dear Experts / friends,

I wish to know accounting of foreign exchange transactions. Request you all to guide me.

Mr. B purchases and sells goods in dollar currency. He raises sale bill and receives purchase bill in foreign currency and also receives and pays in foreign currency, say $.

Part A – Recording of Sale & Purchase transaction -

Suppose, he raises a sale bill on Mr. A of 100 $ on 05-03-12 (rate as given on RBI site is, say, 49.7958):

05-03-12
Mr. A ------ Dr Rs. 4979.58 (100*49.7958)
To Sales Rs. 4979.58

On 31-3-12, bill is outstanding then, the entry will be for foreign exchange gain or loss. (say, if rate as on 31-03-12 is not published / available on RBI site, so we take earlier day rate. Say, rate available on 30-03-12 is Rs. 51.1565)

Since rate is higher than rate on 05-03-12, he has notional gain i.e. more receivable from Mr. A in rupee terms. So, the entry will be:

31-03-12
Mr. A ------ Dr. 136.07 [(51.1565-49.7958)*100]
To Foreign Currency gain a/c. 136.07

Thus, as on 31st March, receivable from Mr. A will be Rs. (4979.58+136.07) = Rs. 5115.65.

We receive the payment on 16-04-12. Rate on 16-04-12 is say Rs. 51.659/-

Bank a/c ----- Dr 5165.90
To Mr. A 5115.65
To Foreign Currency gain a/c. 50.25

Similarly for purchases.

Part B – Receipts & Payment entries
Secondly, I wish to know about receipts and payments done through Bank EEFC a/c, opened for recording receipts and payments in dollars.

Suppose, there are two entries in this account. One payment entry of $225 as on 05-03-12 and receipt entry of $335 as on 19-03-12.

Thus while passing entry for above two entries, we will convert above $ amounts on respective dates. (Bank commission is ignored)
i.e. Rupee value of $ 225 = 225*49.7958 = 11204.055 (-) &
Rupee value of $ 335 = 335*50.1245 = 16791.7075 (+)

Therefore net effect of above in Rs terms = 5587.6525 (+) as on 19-03-12 i.e. as per our Rupee accounting system, bank balance will be Rs. 5587.65

For bank, since it’s a foreign currency a/c, closing balance as on 31-03-12 will be $ 335-$225 = $110.

To match the bank balance as on 31-03-12, we have to show this as closing balance in rupee terms on 31-03-12. Therefore we will convert this at rate as on 31-03-12 and if same is not available on 31st March then as on 30-03-12 (is it correct?? Or as on 01-04-12) say rate is 51.1565.

Therefore closing balance as per bank as on 31-03-12 will be $110*51.1565 = 5627.215

Thus there is positive difference of Rs. 39.5625, which will be foreign exchange gain. We will pass journal entry for this as.
Bank a/c ---------- Dr Rs. 39.56
To foreign currency gain a/c 39.56


I wish experts, friends to advise me whether my above understanding is correct or requires my attention to some of areas. Also share your views about accounting of foreign exchange transactions.

For office use we taken one building premises for lease for 30 years and the full amount of lease paid as advance.
to write off those amount for every financial year up to 30 years to the lease hold expenses.

1. to treat nature of expenditure the amount as capital or revenue ?

2. to write of the advance, if it is revenue the balance amount is shown as every year up to 30 years as advance ?
3. what is procedure to be followed.if capital depreciation is considerable

Dear Sir,

If we will not to pay our creditors and it is showing in the creditors in Tally. Then what should be the entry by which we can remove this. We have no intention to pay nor they are demanding. Hence the amount is showing in tally from last one year at creditors

Hello to all Experts
One of friend is a web designer and want to expand his business. For that he required the fund to meet his requirement. For this purpose he approach the bank which are asking to submit the CMA data for 5 years on projection basis.
Now my question is that what should be considered while preparing the CMA data for web site designers.

Regards
Naveen

Manfacturing company,incorporated in 1994 and started commercial production in 2007. rent, salaries, r & d,raw material purchases( on them vat, excise duty)business promotion exp etc. how to treat them in accounts and income tax. as per revised AS 26 there is no treatment for preoperative expenses. correct me if i am wrong.

sir,
i have purchased a laptop battery. it should be capitalise or revenue.

There was miscellaneous expenditure of Rs.20,000 of which we are writting off Rs.2000/- each year. Now, Rs.18000/- stands in our account. In revised schedule-VI, there is no place to show Miscellaneous Expenditure.
Please, suggest us whether it should be written off fully or it can be treated in some other manner.

I have one query regarding AS- 26 (intengible Assets).... Suppose I Purchase an Assets worth Rs. 100000 as on 01.04.2005 and its life is 10 year. I forgot to amortization its value in book of accounts. in the F.y.2011-12 i realized that I forgot to amortization its value in book of accounts. now what type of treatment should i do in books??? please solve this Queiry ASAP