Foreign exchange gain in store consumables

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Divya Agarwal (Querist)
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30 April 2014 Dear Experts,
A company has imported some store consumables from Korea,having exchange gain of RS 2000 on purchases of 200000. can company can pass a jv entry :

forex gain A/c dr. 2000
To stores& spheres A/c 2000

or it has to transferred to P&L A/c

Prashanth

Prashanth (Expert)
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30 April 2014 Hello,
Transfered to statement to profit and loss account.

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Divya Agarwal

Divya Agarwal (Querist)
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30 April 2014 Thanks prashanth for your help

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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01 May 2014 Foreign Exchange Gain recognised on purchase has to be credited to Profit & Loss Accounts.

Refer Accounting Standard 11.

Exchange differences arising on the settlement of monetary items or on reporting an enterprise’s monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, should be recognised as income or as expenses in the period in which they arise.

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Divya Agarwal

Divya Agarwal (Querist)
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01 May 2014 Thanks for explanation it was really helpful.

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