As per AS 11,
in case of Foreign dealings,Diff due to fluctuation in Foreign Currency is debited/credited in Foreign exchange fluctuation (FEF)A/c at the time of realisation or on 31/3....whichever is earlier.
on my audit,i found that,party in the foreign is first giving advance then after few weeks sale is booked.so when the entry for foreign exchange fluctuation A/c should be passed.....accountant is not passing any such entry.but in my view entry shud be passed at the time when sale is booked.
what if adv is of $1000on .say.1/1/10
and sale is for $15000...on ...say...15/1/10
and balance $14000 receipt on...say.....20/1/10
i think FEF in r/o $1000 on 15/1 and in r/o 14000 on 20/1.
AM I RIGHT?
plz reply soon.
CAclubindia
