Forward contract
This query is : Resolved
03 May 2012
I have some doubt about accounting treatment of forward contract.
A company, export house, has booked forward contract for sale of USD. On 01.01.2012 it has booked forward contract of USD 20 lakh for 9 months ( dated 30.09.2012) at rate of INR 50 per USD. Premium paid for this is Re. 0.95. Spot rate on 01.01.2012 is 48. Accounting year is financial year. This transaction is only forecasted transaction. What should be the treatment of this forward contract in balance sheet ending 31.03.2012 ?
A company, export house, has booked forward contract for sale of USD. On 01.01.2012 it has booked forward contract of USD 20 lakh for 9 months ( dated 30.09.2012) at rate of INR 50 per USD. Premium paid for this is Re. 0.95. Spot rate on 01.01.2012 is 48. Accounting year is financial year. This transaction is only forecasted transaction. What should be the treatment of this forward contract in balance sheet ending 31.03.2012 ?
03 May 2012
Forward contract with some bank is not DERIVATIVE transaction and hence no confusion on account of mark to market. On 1.1.2012 the entry is made in the books of accounts at the premium rate paid. You do not have to do anything because you have passed on the fluctuation risk on to the heads of BANK by paying the premium. Make disclosure by way of note.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- Liable to deduct tds and 44ADA
- Payment to foreign customer
- Is Interest applicable for payment made through credit ledger vide DRC03 for FY 2020-21 & 2021-22
- Subscription paid to foreign customer
- Non issue of e way bill
- ECO SUPPLY REPORTIONG IN GSTR-1
- Internship/Academic shown in Salary Pay Slip of a Doctor
- TDS PROCEDURE ON SALE OF IMMOVABLE PROPERTY BY NRI
- Refund of 20%pre-deposit paid for stay application
- ASISSE return under the provisions of the Collection of Statistics Act, 2008 (7 of 2009)
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
