Hi
Can a foriegn exchange entry of sale and purchase could be set off in the books of account, if the export or import is done from the same party.
For eg.
A has imported goods 'd' from B for 100$ and subsequently
A has exported goods 'c' to B for 150$.
can A set off 100$ against the payment to be made to B and B would transfer only 50$ to A's account
Regards
Mahendra
yes it can be set off
Can u'll guide me on the documentation part
regards
mahendra
Also consider the provisions of AS-11
Say on 20-11-11 A has imported goods 'd' from B for 100$
Check the exchange rate , for example 48 rupees = 1 $
Then pass
Purchases 4800
to B 4800
Suppose A has exported goods 'c' to B for 150$ on 21-11-11 ,check exchange rate (assuming 47 rupees= 1 $)
B 7050
to sales 7050
The difference between the exchange rates should be disclosed in P&L A/c
In the given case there is gain of 1 rupees on 1$ , therefore gain is 100x1 =100 rupees
Suppose when the balance money is given (for eg. on 30-12-11 and exchange rate is 46 rupees per $)
then there is loss of 1 rupees per $ , therefore loss is 50x1 =50
Net effect is gain of 50 rupees and same should be disclosed in P&L
CAclubindia
