Forex accounting treatment
This query is : Resolved
04 August 2010
Hi,
We transact all the foriegn payments currencies through FC A/C .
We normally accumulate the foriegn currecny whenever rate is good and use them when required.
Now , when we buy this foriegn currecny @ what rate we shall book?currently we book it at actual rate now ... pls advice me the currect treatment.
futher, @ what rate we shall book the supplier ? ie. costing the shipment. we use average rate of currency we bought
earlier .
also let me know at what rate we should make the payment for settling supplier ?
we use average rate of currency we bought earlier .
should i close this account every month by appying the actual closing rate and difference transfering to Forex loss/gain a/c?
kindly advice me here or @
Saifuo0209@gmail.com
Regards,
Saifudheen Hamza
We transact all the foriegn payments currencies through FC A/C .
We normally accumulate the foriegn currecny whenever rate is good and use them when required.
Now , when we buy this foriegn currecny @ what rate we shall book?currently we book it at actual rate now ... pls advice me the currect treatment.
futher, @ what rate we shall book the supplier ? ie. costing the shipment. we use average rate of currency we bought
earlier .
also let me know at what rate we should make the payment for settling supplier ?
we use average rate of currency we bought earlier .
should i close this account every month by appying the actual closing rate and difference transfering to Forex loss/gain a/c?
kindly advice me here or @
Saifuo0209@gmail.com
Regards,
Saifudheen Hamza
05 August 2010
For you it will be advisable to refer Accounting Standard 11 issued by the ICAI. The link is as follows
https://www.icai.org/post.html?post_id=474
https://www.icai.org/post.html?post_id=474
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