Foreign exchange difference
This query is : Resolved
13 April 2012
foreign exchange difference on account of acquisition of fixed assets needs to be capitalised or not? as as 11 doesnt permit it to do so ? but schedule vi does
CA Kishore Tallam
(Expert)
14 April 2012
For the financial years commencing on or after 01-04-11, the foreign exchange fluctuations on foreign currency loans for purchased fixed assets cannot be capitalised since now ASs prevail over Rev Sch VI.
15 April 2012
i have paid advance to foreign company to purchase fixed asset agaisnt lc how to account for this transaction and consider which rate to determine the foreign exchange difference? should i take exchange rate on date of payment or receipt of machine to mumbai port as my purchase order is cif mumbai
CA Kishore Tallam
(Expert)
17 April 2012
The fixed asset should be recognised at the exchange rate when the significant risks and rewards are transferred to u. In respect of what rate to use, u may use the exchange rate which is regularly followed by ur company or RBI rate could be possible alternative rate.
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