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AS-11 Query

sachin (jjhj) (49 Points)

11 November 2007

Wats the final take on the capitalisation of excahnge diiference inrt borrowings taken in foreign exchange. Does it have to be capitalised for limited companies or charged off to p&l a/c?

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2 Replies

Aisha (Finance Professional) (8544 Points)
Replied 11 November 2007

If the diff is after development starts it is to be capitalized...

Ankit Dangayach (Chartered Accountant) (691 Points)
Replied 11 November 2007

Both the treatment are allowed till there is no amendment in companies act schedule VI.But if any company continue to capitalize such exchange difference auditor cannot qualify the audit report because wherever there is contradiction in treatment between AS & Law ,law prevails. I think such amendment in companies act will be made in New companies act which will be introduced in parliament shortly.