Exchange rate variation
This query is : Resolved
30 December 2011
Should we calculate exchange rate variation at the time of purchase if payment made in advance ,
30 December 2011
Where payment is made in advance then exchange rate difference will be calculated at the time of booking purchase invoice.
30 December 2011
Dear friend.
As per AS 11 advance payment is treated as non monetary asset and recorded at historic cost. and onse the payment is made there is no case of forex gain or loss for that part of transaction.
Regards
As per AS 11 advance payment is treated as non monetary asset and recorded at historic cost. and onse the payment is made there is no case of forex gain or loss for that part of transaction.
Regards
31 December 2011
Mr Mahesh I do not agree with you.
Kindly explain what will be the treatment in the following case:
Advance of USD 50,000 given in May for a purchase. USD rate is Rs. 50.
Material received in July when exchange rate is Rs. 52.
Exchange gain will not arise in this case??
Kindly explain what will be the treatment in the following case:
Advance of USD 50,000 given in May for a purchase. USD rate is Rs. 50.
Material received in July when exchange rate is Rs. 52.
Exchange gain will not arise in this case??
31 December 2011
Dear mahesh caan u plz give the reference note of AS 11
31 December 2011
I am sorry i did not explain it properly
let me explain you with an example
product cost $150
Advance payment $100
Financial year 2010-2011
Transaction date 29 Mar 2011
Advance payment date 29 Mar 2011
Material receipt date 29 Mar 2011
Balance payment date 3 April 2011
Exchange rate on 29 Mar 2011 Rs 49
Exchange rate on 31 Mar 2011 Rs 50
Exchange rate on 3 April 2011 Rs 51
Now when you pay an advance 100*49=Rs. 4900
this amount would be recorded in books
on 31 Mar 2011 (Year end books closure)
Exchange gain or loss 50*1=Rs. 50
This loss would be booked as of 31 Mar 11
While making the full and final payment further loss of 50*1=Rs. 50 would be booked
I hope i made it clear.
let me explain you with an example
product cost $150
Advance payment $100
Financial year 2010-2011
Transaction date 29 Mar 2011
Advance payment date 29 Mar 2011
Material receipt date 29 Mar 2011
Balance payment date 3 April 2011
Exchange rate on 29 Mar 2011 Rs 49
Exchange rate on 31 Mar 2011 Rs 50
Exchange rate on 3 April 2011 Rs 51
Now when you pay an advance 100*49=Rs. 4900
this amount would be recorded in books
on 31 Mar 2011 (Year end books closure)
Exchange gain or loss 50*1=Rs. 50
This loss would be booked as of 31 Mar 11
While making the full and final payment further loss of 50*1=Rs. 50 would be booked
I hope i made it clear.
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