Exchange Fluctuation in Export Sale

Take an Example to clarify your query...

Suppose Invoice amount is 2,000$.

Now if Exchange rate at the time of sale is Rs.50=1 US $.

Entry will be

Debtors    Dr.     100,000

  To Export Sales        100,000

Now, suppose at the time of closing accounts rupee appreciate and spot rate came to Rs. 45=Us $1.

Now, as per AS-11, we will reinstate foreign Debtors at this prevailing rate.

Entry Would be

Difference in Exchange Dr.  10,000(2000$*5)

  To Debtors                              10,000

Hence Rs. 10,000 will be shown as an expense in Trial.

Now, I believe that above Example has answered your query.

Regds

Vipul garg

Continuing with above example....

If amount was recieved in advance when exchange rate stood at 1US$=Rs. 45...

Entry would be

Bank a/c Dr. 90,000

     To Advance from customer 90,000

If at the time of sale Exchange rate is 1US$=Rs.50

Sale entry will be

Debtor dr. 100,000

      To Export Sales 100,000

Adjustment Entry would be

Advance from Customer dr. 90,000

Difference in Exchange dr. 10,000

             To Debtor 100,000

~Vipul Garg~

thanks for entry

hi friends

please can any one clarify my doubt

we have booked a forword contract for usd 1,00,000 at the rate of Rs.50 per 1 usd and contract period is one month and we have negotiated a  export document at forword contract rate for usd 1,00,000

at what rate sales would be accounted in our books

and also explain me what is forword contract rate and spot rate,

Hi freinds,

Can you tell me that as per AS-11, whether any export Customer Advance has to be re-instated periodically and any exchange gain/loss is to be calculated at the quarter end/year end.

Or the exchange gain/loss is to be calculated at the time of adjustment of customer outstanding, it may be happend after the  01 year/06 month from the receipt of such foreign advance.

Regards,

Krishna

MOB-7504492639

I think we can opt an a/c head as Exchange Gain/Loss wherein we can a/c all + or - in the same a/c. If I am correct.

i have received the advance on 27th march 18 and bill made in next financial year i.e. 13th april 2018 so what will be the closing entry as on 31.03.2018 ?

Please help