Dear All,
Our company imported a IT asset. It made advance payment say US$ 1000 at the exchage rate of 44. At the time of invoice as well as receipt of material, the exchange rate is say 45. What accounting entries to be passed in the books and what treatment to be given for exchange gain/loss. Please answer at the earliest quoting reference to AS or schedule VI (existing or revised) or any other guidance note.
Thanks
Any advances paid for buying inventory and capital items are non monetary items as per AS 11, and therefore need not to be restated. It will be initially recorded at rate prevailing at the time of payment and further no restatement is required.
Aggarwal Sarawagi and Co
New Delhi
CA
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CAclubindia
