Export import

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

 

Replies (4)

yes it can be set off

DEFINATELY, AGREE WITH ASHISH

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

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