Capitalisation of forex loss/gain on fixed assets
This query is : Resolved
12 February 2010
Hi friends,
i need to know the accounting treatment for the forex loss or gain on the fixed assets purchase for which we have given 100% advance.
and what if paid after getting the fixed assets.
i need to know the accounting treatment for the forex loss or gain on the fixed assets purchase for which we have given 100% advance.
and what if paid after getting the fixed assets.
12 February 2010
As per accounting standard 11, the forex loss or gain in respect of transactions entered into on or after 1.4.2004, the difference arising on settlement of monetary items should be recognised as income or expenses in the period in which they arise.
The notified AS 11 contains a footnote that The accounting treatment of exchange is required to be followed irrespective of the relevent provisions of Schedule VI of the companies Act, 1956.
Hence the gain or loss is to be charged to profit and loss account.
If you are receiving Journel of the ICAI, then go through the openion given in February 2010 Journel which will clerify your querry.
The notified AS 11 contains a footnote that The accounting treatment of exchange is required to be followed irrespective of the relevent provisions of Schedule VI of the companies Act, 1956.
Hence the gain or loss is to be charged to profit and loss account.
If you are receiving Journel of the ICAI, then go through the openion given in February 2010 Journel which will clerify your querry.
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