Foreign currency transactions
This query is : Resolved
MANOJ GIDWANI
(Querist)
31 May 2012
Pls. tell me the treatment of the following problem as per AS-11:-
Suppose a pvt. ltd. co. have import and export business which also sells in domestic market. They import some goods on 100% advance payment. Suppose Rs 50000 (bill raised in foreign currency of $1000 @ Rs 50 per dollar) but actual deliverly of the gooods received later in the same financial year. But at the time of acutal delivery BOE is with Rs 55000.(@Rs55 per dollar) Due to change in exchange rate.So pls tell the accounting entries for this problem and whether their is any gain or loss as per AS-11? If yes pls. also metioned that entries.
Suppose a pvt. ltd. co. have import and export business which also sells in domestic market. They import some goods on 100% advance payment. Suppose Rs 50000 (bill raised in foreign currency of $1000 @ Rs 50 per dollar) but actual deliverly of the gooods received later in the same financial year. But at the time of acutal delivery BOE is with Rs 55000.(@Rs55 per dollar) Due to change in exchange rate.So pls tell the accounting entries for this problem and whether their is any gain or loss as per AS-11? If yes pls. also metioned that entries.
CMA Nishad Patkar
(Expert)
31 May 2012
It is a gain on account of change in exchange rate.
On the date of Advance Payment---
X pvt. Ltd DR. 50000
To Bank 50000
On the date of Booking of Invoice
Purchase DR. 55000
To X Pvtl Ltd 50000
To Exchange Rate Fluctuate 5000
It is a gain on account of change in exchange rate.
On the date of Advance Payment---
X pvt. Ltd DR. 50000
To Bank 50000
On the date of Booking of Invoice
Purchase DR. 55000
To X Pvtl Ltd 50000
To Exchange Rate Fluctuate 5000
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MANOJ GIDWANI
(Querist)
31 May 2012
Dear Nishad u'r reply is as per AS-11 or not pls. mentioned? if yes then pls mentioned the paragraph of AS-11 which show the treatment of the above entries.
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