I have a query that my uncle take a loan for his business for purchase of goods but at the time of payment the dollar rate was increase and he suffer some fluctuation loss now I want to know how should we treat this loss ? whether too show this as revenue loss or capital loss ?and can we adjust this loss against the future exchange profit?please reply
09 January 2013
there is no classification as revenue or capital with respect to forex loss, except in the case of purchase of qualifying capital asset, the forex loss to the extent of difference in interest rates can be capitalised. it can very well be adjusted against exchange profit
CAclubindia
