CA Anil Agarwal (Practicing CA) (67 Points)
12 October 2011As per AS-11 in case of non integral subsidiary while converting deprecition into indian currency what rate should be taken as it is both balance sheet and P&L item ? if i take depreciation on closing rate then my profit wont be at average rate and if i take it at average rate my fixed assets wont be at closing rate? should i take it in average rate in P&L and at closing rate in Balance sheet adjusting the difference in Exchange rate variation A/c ??
ACCOUNTANT
(Student)
(559 Points)
Replied 12 October 2011
Depreciation will be solely provided at the rate adopted on the historical cost of the asset(i.e. the exchange rate on the day of the transaction)....since dep is charged on that cost no effect of closing or average rates would be posed on it...
(Either in the p&l or in the bal sheet)
CAclubindia
