I wish to know practically how to account for an export bill for say 10,000.00 USD.
Exchange rate as on which date should be used? The date of invoice?, The date of Shipping Bill? or the date of Bill of Lading?
Also, which exchange rate do we use? Do we use the customs notified rate for the particular month? Do we contact our banker, who is to receive the foreign exchange, for its TT buying rate for that particular day? or can we use rates given in websites such as x-rates.com?
Regards
hai, Practically for our client, we take Exchange rate as per customs act u/s 14.
YOU SHOULD USE THE NOTIONAL RATE (MONTHLY) AS PER CUSTOM.
WHEN YOU RECEIVE PAYMENT FROM CUSTOMER ACCOUNTING SHOULD BE DONE ON THE BASIS OF REALIASTION RATE GIVEN BY BANK AND THE DIFFERENCE BETWEEN BOTH RATE WILL BE TREATED AS 'EXCHANGE RATE FLUCTUATION' AND DR/CR TO EXCHANGE RATE FLUCTUATION A/C (P/L).
For invoiceing - RBI rate refrence or exim bank refrence of the invocie date can be taken. and realisation is as per bank advice rate shown in their advice copy. Bank charges should also be taken as realsiation.
My views since custom rates are decided on avg basis that too before starting of the month, i think it is not the appropriate rate to decide the intensity of forex change. Moreover this rate is only for duty payment no where they declare that it should be the billing rate.
hi......if on the balance sheet date, there is change in exchange rate......then should we increase/decrease the amount of debtors on that date??
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