As 16- as 11 - as 10

Dear

Members ... Please go through the following ( hyphothetical) case .

A Plant purchased  from USA for $1000 ( exchange rate Rs 50 /$) on 1.2.14   by making a foreign currency loan at the interset rate of 5% p.a..On the closing day 31.03.2014 the ex rate was 51 and on the payment date 31.4.2014 the ex rate was 53. The loan could have been made in local currency at the rate of 10 % p.a..

 questions are

1. What will be the impact on 1.2 , 31.03, 31.4  as per the AS11...how entries to be passed?

2.the difference between 1.2  to 31.3  .and  31.3  to 31.4 where it will be adjusted?

3. will there be any change in historical price

4. effect of AS 16 ..borrowing cost ?? and what amount will go to p/l ? 

5.oveall synchronization of AS 16 ,11 and 10 ??

Thanks

 

Replies (6)

Sharing my working

But in the given case it is not long term Foreign Currency loan. So P. 46 not applicable

 

Int at the rate on F.C= 51000*5/100*59/365= 412

As per Indian rate= 51000*10/100*59/365= 824

---------------------------------------------------------------------------------\

Diff                                      =                           412

Exchange Diff.                    =                           1000

Capitalisation should be made upto======    412 only

balance should be trns....to P&L a/c====       588

 

 

How to decide it is long trem liability as per para 16 .there is another point in case of depreciable assest we can adjust the difference in cost of assest but how ,,if we can do so then the historical cost will change ??  what will be the treatment of non depciable assests?? furthert there is a option available upto 2020 that thr fluctuation instead of charging in p/l we can create reserve ? 

mometary ...non monetary ,, depreciable , non deprecialble  ...its making CONFUSION

As you have PM ed me the assumptions. I have tried to answer. You can also go through CA Final module Chp. 1 for Borrowing Cost example.

I would suggest you to study As 11 & AS 16 first separately & then go for combined reading

module sum attached for as 16

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details
Company
14 October 2026
GST & TDS ASSISTANT

AGGARWAL SANJAY & ASSOCIATES

New Delhi

B.Com

View Details
Company
14 October 2026
Asst. Manager/Dy Manager (Costing)

manufacturing

Pune

CMA

View Details
Company
18 September 2026
Accounts & Finance Specialist

ULTRA CHEMICAL WORKS

Thane

CA Final

View Details
Company
20 September 2026
Semi Qualified CA

Navin & Associates

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
07 October 2026
Senior Account Manager

Amplio Invest

Mumbai

M.Com

View Details
Company
ARTICLESHIP 18 September 2026
Industrial Trainee

Twenty Point Nine Five Ventures Private Limited

Noida

CA Inter

View Details