Foreign currency Rate

Dear Mr. Sanjay,

As-11 Shall be Applicable for such Type of Transactions. These Transactions are known as Foreign Exchange Transactions. As per As-11 "Accounting For Foreign Exchanges", Assets ahall be recorded at rates prevailing at the time of purchase of assets and at the year ended exchange difference shall be transferred to Exchange Fluctuation reserves and shall be charged to Profit & Loss Account. At the year end 31.03.2009 10000* (50.95-48.72) =Rs. 22300/- shall be transferred to Exchange Fluctuation Reserve Account and same shall be charged to Profit & Loss Account.

regards,

ratan

Dear Mr.Rajat,

Thanks for reply in part. As I have asked as to entries to be passed on (i) date of Purchase (ii) date of Balance Sheet 

(iii) Date of Settlement.  However you replied only first two. what's about third. Further i had doubt that when Foreign currency amount is basically used for acquisition of Machinery i.e. on Fixed Asset being capital in nature then how the variations/devitions in foreign excchange rate is routed through Profit & Loss Account as in my knowedge it affects only Fixed asset i.e. Machinery.

Please clarify.

Regards.