Conversion charges

What does "conversion charges" refer to in the income section of the P&L a/c right below sales ? Is it the same as the conversion cost?
Replies (2)

When you charge for some goods or services in home currency, but the customer is able to pay the amount in othe currency, for customer convenience we will bill the amount in home currency(primary) and then foreign currency (secondary currency in which the customer is ready to pay). Most of the times there will be appreciation or depreciation of the currency which will lead to either excess or deficit, if there is excess then you will find it below sales other wise you will see it in debit side.

Thank you for your response.

I had a further query though. If in the income section of a P&L account, 'conversion charges' in the only item, does it mean that it refers to the total value of sales converted in the primary currency ?

 

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