We have paid advance in foreign currency to buy a asset, expected delivery of asset in after one year only.
We have revalued the open advance as per applicable closing exchange rates.
Pls suggest is this treatment correct ?
EX : paid $1000 advance (ex rate was 50) we recorded 50,000 advance in books.
in March'12 ex rate was 55 - Can we show 5,000 (5*1000) as gain to P&l ??
absolutly correct,for further reference u cn go for following link.
But 100 % advance is already given in Forr currency, there is no payble in terms of money, only thing what we are expecting is asset, corresponding advance is open against that......now also your reply will be same ?
CAclubindia
