Conversion charges
Debpriya De (5 Points)
21 January 2017Debpriya De (5 Points)
21 January 2017
CA Uday Kiran
(Chartered Accountant)
(653 Points)
Replied 21 January 2017
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.
Debpriya De
(5 Points)
Replied 26 January 2017
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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