Financial path

Practically it occurs when there are dealings relating to trade receivables & trade payables with foreign countries..

Suppose you sold certain goods/ services to foreign country & the USD vs INR changes or other currency changes then there can be gain or profit due to currency fluctuation.


Since profit / the loss is on account of foreign currency transactions , it can be credited or debited to P & L through foreign exchange gain or loss ledger

If the date of invoice and date payment or receipt in foreign currency differs then there can be foreign exchange gain or loss as said by Mr.Reddy .

There are many situations like balance sheet items also have to be restated to the closing date of financial year

I tried to give examples but numbers are not been accepted by this post form ..

There are many foreign currencies like USD , €,¥, S$, Chinese Dollar etc .If Indian entities have dealings with foreign entities and the invoice amount is in foreign currency then only these foreign exchange gain or loss occurs relating to trade payables or receivables.


If the invoice is in Rupees then there won't be any gain or loss even if there is dealings with foreign country

Could you plse give me an example in case persons

I think this plat won't accept dates and numbers since they blocked mobile numbers ..

If the invoice is quoted in Home currency say INR then it won't increase or decrease our payment/ Receipt.

It will be gain or loss to foreign country assessee.

If the invoice is foreign currency then it's a gain or loss for us but for counter party there is no gain or loss.