Foreign exhange

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2015 sir,
can you please suggest about foreign exchange, my query is when booking of export sales to a foreign rate taken from customs declaration rates,where as we receive USD form debtor which rate we have to take weather we receive usd In EEFC a/c

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 April 2015 As per Accounting standard 11 for sale it should be recorded the exchange rate prevailing on the date of sale. Customs exchange should not be adopted.
A foreign currency transaction should be recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
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, should be recognised as income or as expenses in the period in which they arise.

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