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Foreign exchange

IFRS 714 views 1 replies

Dear Friends,

Consider a purchase of USD 1,00,000/- by a propreitorship. The purchase was made on 02nd February 2013. Rate as on 02nd February is 58.20 INR. Value of purchase is therfore INR 58,20,000/-. On March 31st 2013 the value of USD = 60.20 INR and When the payment was made in 25th June 2013 the rate was 56.20. Usually the loss will be recorded for the financial year ended 2013 and the gain would be then recorded in next financial year. Now my question is " How will we record or should we record if the rate as on 31st March 2013 was 56.20 and 25th June 2013 was 60.20. As per AS 11 is there any provision not to record the gain arising out of foreign exchange fluctuation.??"

 

Replies (1)

journal entry for purchase as per A S 11 

1 02.02.2013

purchase a/c                            Dr      5820000

                      To Creditors                                          5820000

2 31.03.2013

exchange lossa/c                     Dr    200000

                       To creditors                                         200000

3 profit and loss a/c                   Dr   200000

                        To exchange loss                               200000

4 25.06.2013

Creditors a/c                              Dr   6020000

                       To bank                                               5620000

                       To exchange gain                                 400000

5 exchange gain a/c                    Dr   400000

                       To profit and loss a/c                             400000

 


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