As 11 para 46 and para 46a

Final 12867 views 8 replies

CA final Fin. Reporting

AS 11 para 46 and 46A

If any expert can explain this in clear language will be really appreciated...

Thank you

Replies (8)

as-11 says that any exchange difference (on long term as well as short term items) should be recognised in profit and loss account.

 

but para 46 was introduced on 31.03.2009 and was applicable with retrospective effect from financial year 01/04/2007. para 46 was added by NACAS allowing companies to capitalise the exchange difference on long term foreign currency loans. 

 

para 46 had shelf life upto 31.03.2011. however, then it was further extended to 31.3.2012.

 

but on 31.03.2012 para 46a was added which allowed the companies to capitalise the exchage difference on long term foreign currency loans till 2020. this option can be exercised only once. in other words, once a company has decided either to recognise the difference in p and l or to capitalise it, then it cannot change till 2020.

In the same para it says "in so far as they relate to the acquisition of a depreciable capital asset, can be added to or deducted from the cost of the asset and shall be depreciated over the balance life of
the asset, and in other cases, can be accumulated in a 'Foreign Currency Monetary Item Translation Difference Account' "

I am confused whether option is between treating it as revenue or capital or between adding it cost of asset or between accumulating the difference in Translation difference account??

it is an option between adding it to cost of asset or between accumulating the difference in Translation difference account........

agar humne long term loan fixed asset purchase karne k liye nahi liya hai toh fir captilise kese karenge
loan taken on 31-03-2013 for other than aquiring fixed asset and it is to be paid on 31-03-2017. toh is case mei defferment kab tak karenge??

para 46 and 46a is applicable only for depreciable capital asset......

Para 46 & 46A not covered in As 11 issued by ICAI, it covers in As 11 issued by NACAS 

and applicble on companies only.

It has been added by icai as well

 


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