Depreciation

IPCC 662 views 5 replies

WHEN DO WE INCLUDE DEPRECIATION IN TRIAL BALANCE IN FOREIGN BRANCH CHAPTER.IN SOME QUESTIONS IT IS DIRECTLY DEBITED IN PROFIT & LOSS A/C & SOMETIMES IT IS CONVERTED FROM FOREIGN CURRENCY TO INDIAN RUPEES N SHOWN IN TRIAL & PROFIT & LOSS A/C.

 

PLEASE TELL ME .

I'M VRY CONFUSED.

Replies (5)
it is true that the items in the trial balance of foreign branch should be converted into the currency of the head office[as per guidelines for translating foreign currency into head office currency(to be read with AS-11)]. at that case depreciation on fixed assets should be converted at the same rate at which the converted fixed asset is converted and is directly debited to profit & loss a/c.

abhishek if dep is given in additional info.then what will be its treatment.

at first u convert foreign currency in indian rupee and calculate the amt. and then convert as per rate given by foreign currency nd debited the amt. in p/l and show in b/s after deducting frm fixed assets.
at first u convert foreign currency (depreciation working ) in indian rupee and calculate the amt. and then convert as per rate given by foreign currency nd debited the amt. in p/l and show in b/s after deducting frm fixed assets.
if you are using book of prof. amitabha basu - financial accounting then you see the illustration no.46 Of branch a/c chapter i hope it ll be very helpful to u it was also came in [CA Inter November, 1999]


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