Whether retention money of foreign supplier of capital assets are to be reinstated???
Pls reply with documentry evidence in support of ur answer.
Whether retention money of foreign supplier of capital assets are to be reinstated???
Pls reply with documentry evidence in support of ur answer.
Yes, retention money of foreign supplier is a kind of liability which will be settled in cash in future. Thus, it is a monetary liability which requires restatement at each reporting date with the difference being recognised in income statement.
whether the exchange difference need to be adjusted from cost of capital assets or it will be routed through P/L a/c ?????
It is mentioned in my reply that such exchange differences must be booked in income statement. Adjustment to cost of capital asset is not preferred as it is not of a capital nature expense.
Exchange differences in this case mainly arises from the settlement of liability due to supplier and has nothing to do with the producing capacity of the capital asset.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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