Foriegn Currency account- IAS 21
This query is : Resolved
03 August 2010
Hi,
I am accounts in charge of leading automobile company. 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
I am accounts in charge of leading automobile company. 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
10 August 2010
This response is as per my experience in recent past.
Foreign currency bought-As per actual rate
Booking of Supplier-Actual Forex rate prevailing at the date of invoice
Payment to Foreign vendor-Actual forex rate at the date of payment
Please note that as per AS 11,FC account should be revalued at the closing rate on the Balance Sheet Date.
Foreign currency bought-As per actual rate
Booking of Supplier-Actual Forex rate prevailing at the date of invoice
Payment to Foreign vendor-Actual forex rate at the date of payment
Please note that as per AS 11,FC account should be revalued at the closing rate on the Balance Sheet Date.
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