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Currency Fluctuations

rudram77 (Assitant Accounts Manager) (166 Points)

01 February 2010

what is the treatment for currency fluctuations in the books of accounts?

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jigar (Finance Analyst) (50 Points)
Replied 04 February 2010

Hi,

if you are considering restatement of Assets & Liabilities you will have to restate the same at the closing rates and pass the difference to Profit & Loss account +ve or -ve. OR

are you talking about Hedging currency futures.

CA munjal (articled clerk) (100 Points)
Replied 06 February 2010

I think your question is not specific. The treatment of foreign exchange loss relating to non monetary, denominated in foreign currency, depends whether the asset is recorded at historical cost or fair value.

If the asset is recorded at historical cost then the foreign exchange should be booked as per the rate applicable on the date on which historical cost was determined.