Exchange rate for accumulated losses

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Akhila Vinnakota

Audit Senior

39 Points Joined December 2014

While translating the Trial balance of a foreign subsidary (non-integral operations) , i have opening balance of accumulated losses. At what rate those should be converted and how should i adjust the exchange difference arised.

For Example, i have to translate for 2015-16 and 2016-17 for which i already have Foreign currency figures

In 2015-16, On conversion of Trial Balance my Loss arrived was around Rs. 105000/-

but In 2016-17, on conversion of TB at respective rates , my opening balance of loss is 120000/- which differed due to exchange rate difference in 2015-16 and 2016-17.

Now, for 2016-17 should i consider 105000/- or 120000/- as opening. If it is 120000/-, how should i adjust excess 15000/-???

Thanks in advance.

Replies (2)

p.sunil kumar reddy

Article trainee

41 Points Joined June 2017

BEING THE REASON,THE YEARLY LOSS OR PROFIT OF FOREIGN BRANCH TRANFERRED TO HEAD OFFICE ACCOUNT , THERE WONT BE ACCUMULATED LOSSES OR PROFITS IN FOREIGN BRANCH ACCOUNTING ..THERE IS ONLY HEAD OFFICE ACCOUNT IN THE BOOKS OF FOREIGN BRANCH ..AND WHILE THE PREPARATION OF TRIALBALANCE OF FOREIGN BRANCH IN INDIAN CURRENCY,TAKE THE EXACT FIGURE APPEARING IN THE BRANCH ACCOUNT IN THE BOOKS OF HEAD OFFICE AS THE BALANCE OF HEAD OFFICE ACCOUT IN FOREIGN BRANCH BOOKS....