ForeignCurrency Reinstatement

You are right, but we don't do the reversals in the next month say april, becuase once you do the next year/ next quarter/ next monht restatement it gets adjusted automatically, right. So its not required to reverse, the entry.

Thanks madam for the reply.

But I am not able to understand the second part of your reply. If the reversal is not done, how will the party account reflect?

Should I do the revesal or not?

If I Should pass the reversal when should I do that?

say for example, you receive $ 1000 in the current month @ rs.47 / 1$. in the end of the month say, the dollar rate is rs.48 / 1$. you get re.1 per dollar, ie rs.1000/- gain overall. now you are putting an entry for the same. next month say you are receiving $ 1000 @ 47.5. now your total in party account in dollar is $ 2000 in rupees it is 48000+47500 = rs.95500/-. now say at the end of next month dollar rate is 48.5. Now  you are restating @ 48.5 your total amount $ 2000, it comes to rs.97000/- now you are accounting the gain. so what is the need of reversal?. now as on end of the month say today, your dollar account shows the balance at the prevailing rate of exchange.

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