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As 11

jean (article assistant) (113 Points)

11 June 2012

AS 11 does not specify particularly which exchange rate should be used while calculating Foreign exchange gain/loss.

which rate should be used while booking of transaction?(ie invoice date or bill of lading date or the rate of the day on which transaction is booked)

is it appropriate to use rate specified in BOOK of Entry. does AS allow to use this rate.

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8 Replies

CA Ganesh Agarwala (Audit Senior Manager) (239 Points)
Replied 11 June 2012

dear jean

the rate on the date on which actual purchase was made.

cheers

ganesh agarwala

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 11 June 2012

say for example goods is dispatched by A from japan to Mr. B in india and invoice for the same is raised dated 10th June 2012 however the the bill of ladding date is 15th june 2012. then you have to see whether risk of the goods is transfered to Mr. B on 10th itself or on 15th ?

if the risk transfered as and when invoice generated then rate prevailing of 10th should be taken and in case two where risk transfered on 15th then rate prevailing on 15th will be taken

Hope it is cleared to you.

Regards

Madhusudan Kabra

2 Like

jean (article assistant) (113 Points)
Replied 11 June 2012

Originally posted by : Madhusudan Kabra
	As per my knowledge First of all you just check when risk and reward associated with goods is transfered to us and when the liability of the party arises? the day when liability arises.... it should be the transaction date. say for example goods is dispatched by A from japan to Mr. B in india and invoice for the same is raised dated 10th June 2012 however the the bill of ladding date is 15th june 2012. then you have to see whether risk of the goods is transfered to Mr. B on 10th itself or on 15th ? if the risk transfered as and when invoice generated then rate prevailing of 10th should be taken and in case two where risk transfered on 15th then rate prevailing on 15th will be taken Hope it is cleared to you. Regards Madhusudan Kabra

thanks madhusudan,

how can i verify on which date the risk and ownership has been transferred from seller to buyer.

is there any standard rule?

regards

jean

Joey Tribbiani (fdg) (2010 Points)
Replied 11 June 2012

Originally posted by : jean
	Originally posted by : Madhusudan Kabra As per my knowledge First of all you just check when risk and reward associated with goods is transfered to us and when the liability of the party arises? the day when liability arises.... it should be the transaction date. say for example goods is dispatched by A from japan to Mr. B in india and invoice for the same is raised dated 10th June 2012 however the the bill of ladding date is 15th june 2012. then you have to see whether risk of the goods is transfered to Mr. B on 10th itself or on 15th ? if the risk transfered as and when invoice generated then rate prevailing of 10th should be taken and in case two where risk transfered on 15th then rate prevailing on 15th will be taken Hope it is cleared to you. Regards Madhusudan Kabra thanks madhusudan, how can i verify on which date the risk and ownership has been transferred from seller to buyer. is there any standard rule? regards jean

The time at which contract for sale is executed and all the formalities related to sale are complete

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 11 June 2012

1. You can inqire with the managment.

2. Insurance documents can be good good proof of establishing the fact.

3. Contact between the parties i.e. when the responsibility of seller come to an end.

Regards

Madhusudan Kabra

1 Like

Gunjan Tulsyan (Article) (222 Points)
Replied 11 June 2012

There is a general practise in the industry to follow the invoice date but it is practically said tht the bill of lading should be taken for FOREX Calculation since it is the bill of lading date on which the risk of goods and ownership gets transferred but this may wary in case u have a different contract for transfer of risk n ownership with ur party...but the practise of following the date to be taken varies in the industry...!!!\

1 Like

sachin (ARTICLES) (434 Points)
Replied 12 June 2012

You can also use import export exchange rate given in https://cbec.gov.in/ website

pawan (article assistant) (28 Points)
Replied 12 June 2012

Originally posted by : Madhusudan Kabra

As per my knowledge First of all you just check when risk and reward associated with goods is transfered to us and when the liability of the party arises? the day when liability arises.... it should be the transaction date.

say for example goods is dispatched by A from japan to Mr. B in india and invoice for the same is raised dated 10th June 2012 however the the bill of ladding date is 15th june 2012. then you have to see whether risk of the goods is transfered to Mr. B on 10th itself or on 15th ?

if the risk transfered as and when invoice generated then rate prevailing of 10th should be taken and in case two where risk transfered on 15th then rate prevailing on 15th will be taken

Hope it is cleared to you.

Regards

Madhusudan Kabra