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Loss in foreign exchange

This query is : Resolved 
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(Querist)
15 February 2013 Dear Experts
Good day and greeting
Your expert advice is seeking on the below mentioned matter .

We are in contract with the Swedish Bank , that financed one of our machine of 70000 EURO. In term we accepted 10 Bills of Exchange payable quarterly .
My question is how the loss in the foreign exchange will be accounted for this loss .
Either by :
1)Debiting Machinery account with the amount , or
2)Debiting Profit and loss with the loss.

Your suggestion on this matter will be highly appreciated .

Thank & Regard
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CA. RAGHAV GARG

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CA. RAGHAV GARG (Expert)
16 February 2013 Dear Shambhu,

The Machinery is to be booked at the agreed rate specified in Invoice of Machinery added by any commission, Freight, Insurance paid.

However, it seems in your case that you are facing loss due to forex fluctuation, which is more of a finance Cost and is therefore can be direct debited to O&L account with as Forex Loss
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