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Querist : Anonymous

Querist : Anonymous (Querist)

15 December 2014 purchase is booked on exchange rate of say 110 considering rate used by bank in lc, but actual rate is say 119 which is fixed rate betn two currencies and payment is also made using this rate, is the treatment of rs. 1 charged to forex gain/loss correct, I am cofused as the exchange rate is always fixed betn these countries, only difference waas due to rate taken using lc rate for purchase

Amol S Joglekar

Amol S Joglekar (Expert)

16 December 2014 How can you expect a BANK to consider such a LOW rate when the RATE is FIXED at 119? Something is fishy in this.
OR this can be only an ACADEMIC question. OR you may NOT be aware of the repurcussions of LC.
(Anyway, the answer is debit this difference to PURCHASE and NOT FX loss)

Querist : Anonymous

Querist : Anonymous (Querist)

16 December 2014 THE AMT IS 120 NOT 110, THAT WAS BY MISTAKE. Nepal and India rate is fixed, but co considered 160.015/100 to book purchase as the rate embedded in ERP, but payment was 160/100, now the co records this diff as forex loss, is this correct treatment, I am confused as ex rate is always fixed.

Amol S Joglekar

Amol S Joglekar (Expert)

16 December 2014 You seem to be KING of ERRORS. Now what is this 160???????????????
Please, if you dont mind, redraft the ENTIRE query, without any errors. PLEASE.

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