Normally reinstatement is done in the year end. We take the balance appearing in the books of accounts & convert it as on 31st March rate (Assuming 31.3.20008). Compare the balance appearing in the books. Difference we take it to Fluctuation a/c (Debit or credit as the case may be). & the party a/c (debit or credit as the case may be).
This reinstatement entry will be passed on 31.03.2008. The same entry will get reversed on 01.04.2008.
Again reinstatement will be done for the balance appearing as on 31.03.2009 with rate appearing as on that date (31.03.2009). Am I Correct? Please let me know.
CAclubindia
