Fixed assets
This query is : Resolved
20 September 2011
ABC Ltd Purchase Plant & Machinery from USA
on 10/6/2010 @ USD-48=RS.1 at UDS-1000
On march 31 there is outstanding of UDS 400
and the rate USD-49=RS.1
how this will be reflect in balance sheet and P&L
Pls clearfy me the all effect
relpy
on 10/6/2010 @ USD-48=RS.1 at UDS-1000
On march 31 there is outstanding of UDS 400
and the rate USD-49=RS.1
how this will be reflect in balance sheet and P&L
Pls clearfy me the all effect
relpy
21 September 2011
Para 12 of AS 11 provides that payables are examples of monetary items.
Further, Para 11 provides that at each Balance Sheet date, foreign currency monetary items should be reported using the closing rate.
Also, Para 13 provides that exchange difference arising on reporting monetary items at rates different from those at which they were initially recorded should be recognised as income or expense.
Accordingly, the treatment will be as under:
Payable = USD 400* 49 = Rs. 19,600/-
Exchange loss (to be debited to P&L Account) = USD 400*1 = Rs. 400
In your books the payable account must be showing a balance of Rs. 19,200.
Pass the journal entry:
Exchange Loss Dr 400
To Payable 400
Further, Para 11 provides that at each Balance Sheet date, foreign currency monetary items should be reported using the closing rate.
Also, Para 13 provides that exchange difference arising on reporting monetary items at rates different from those at which they were initially recorded should be recognised as income or expense.
Accordingly, the treatment will be as under:
Payable = USD 400* 49 = Rs. 19,600/-
Exchange loss (to be debited to P&L Account) = USD 400*1 = Rs. 400
In your books the payable account must be showing a balance of Rs. 19,200.
Pass the journal entry:
Exchange Loss Dr 400
To Payable 400
29 September 2011
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