Dear All,
We are a US Subsidiary company(software). We do work for our parent company in US and for the same we raise invoices in Indian Rupees.
For Ex : Apr - 200000 May - 150000 Jun - 85000
When the parent company pays us back, they pay in USD which it turn is converted in to INR and deposited to our bank account. Sometimes they also pay little bit advance money. Basically they do not do invoice to invoice settlements. They pay us some adhoc money. Assume we got a receipt in July for 600000 (10000 USD @ 60₹).
How to account for exchange gain/loss in this scenario. How the Stat auditors will look at this ?Can I apply the amount to the invoices just like that and keep the remaining amount as advance? Dont I need to do a comparison to ascertain the exchange gain/loss ? Since we bill in INR I cannot even do a dollar to dollar comparison. I tried researching on this in google at all places, but I am not able to get an answer. Could any of you please help me in this regard ? Thank you !
CAclubindia
