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Foreign Exchange Gain/loss

deepak k p (chennai) (36 Points)

29 August 2009

how to find out foreign exchange gains & losses?

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Pulkit Agarwal (CA. Final) (455 Points)
Replied 31 August 2009

Originally posted by :deepak k p
"	how to find out foreign exchange gains & losses?	"

In What case do you want to compute...... plz specify your case

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Surbhi Naik (CA -Article Student) (67 Points)
Replied 10 September 2009

have problem in the import purchases: Suppose I paid $5000 @ 45.15 on 25/5/2009 in advance for purchases of material which cost me $25000, I received the material on 30/6/2009, I paid balance amt on 25/6/2009 @ 47.20. On import doc. there is specifically indicate tht presentation of dockuments through(wht is the meaning of this?).so at the time of passing the entry rate will have to taken as per BOE for whole $25000 or @ 47.20 *$25000

I'm PCC student , I want to clear my concept !!

pls help me

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Sunil (Trader) (2611 Points)
Replied 17 September 2009

The foreign exchange is normally recognised on the date you recognise the purchase or sale in your books of account. This is for purchase or sale transactions. For Loans, whether you give or take in foreign exchange you account for it on the date of the event. Every repayment or receipt back will be a gain or loss on that date. Every receipt of sale proceeds or payment of purchase proceed will be a gain or loss whether in advance or after the event.

However, on 31st March, you have to value the amount of foreign exchange receivable or payable per rate on that date and recognise the gain or loss from actual date of transaction. Again when you pay or receive in the next accounting year, if you are a going concern you will again recognise the gain or loss at the time of receipt or payment in respect to the valuation on 31st march rate that is adopted to value the transaction in your balance sheet.

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