Sir/Madam,
In my company, a composite Purchase order for R&U of Machinery was placed to BHEL Ltd on the condition that if any machinery imported from outside India, then price variation due to estimated price at the time of placement of order & actual price paid by BHEL at the time of actual purchase,should be born by our company.
In this context, a bill raised by BHEL for foreign exchange variation due to difference in estimate & actual rate & our pre-audit team passed the same. Now question arises, is this FE variation cost may capitalised to respective asset or charges to PL account. Please suggest with reference to latest AS.
Regards,
M.Biswas
CAclubindia
