Provision of foreigh exchange gain

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 April 2014 Company imported raw Material from abroad and some amount payable against such imports as on 31.03.2014 Company imported RM of Rs. 62 per USD and on 31.03.2014 USD value per rupees is 60. In that case company gain of Rs.2 per USD ( 62-60). My question is that company make Provision or not of Gain on Foreigh Exchange as per AS -11 as on 31.03.2014

Please help me.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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15 April 2014 the gain of rs 2 per USD shall be credited to exchange diffrence a/c and ahsll be ultimately to profit and loss a/c.

Rupesh Jain

Rupesh Jain (Expert)
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16 April 2014 you can book the gain if you make less payment for material . and after that gain will reduce the cost of raw material.

Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2014 Thank for your Valuable solutions but

In above case ,Suppose we hedge the transaction of Rs.61 as on 31.03.2014 then for what amount we require to make provision i.e Rs. 2 ( 62-60 ) or Rs. 1 ( 62-61 )

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