Forex transaction entry in tally erp 9

A/c entries 14208 views 5 replies

Prasad Shah

Managing Partner

65 Points Joined December 2012

FOREX TRANSACTION MODEL

USD 10000 invoice raised to Party on 1-4-2013

Material shipped on Board (B/L Date) is 10-4-2013

Party made Payment on 20-4-2013

Amount Received at our Bank - USD 9980

My question is, how to account this transaction.

1. In Tally, which should be the invoice date as entered, whether the invoice raised date or Shipped on Board Date as Invoice Date.

2. Which USD : INR Exchange rate should be used for making Invoice Entry in Tally, whether as per Custom Bill Rate or prevailing Exchange rate on the date of shipment (B/L Date)

3. We receive always USD 20-50 short per remittance, how to Account this short of amount, whether Dollar Collection Charges or some other means.

4. USD 9980 received is converted in INR and credited to our Account on 20-04-2013, on this date exchange rate is different than on 10-4-2013, which results in FOREX GAIN/LOSS. How to handle it.

Kindly solve our queries.

Thank you.

Replies (5)

Rukmani Shankar

CA Job

27 Points Joined April 2013

When the entry is to be done in books:-

Revenue Recognition: Accounting Standard 9

“Revenue from the sale of goods shall be recognised when all the following conditions have been satisfied:- The entity has transferred to the buyer the significant risks and rewards of ownership of the goods…..”

At what rate the sale is to be booked:-

Changes in Foreign Exchange rates –

Accounting Standard 11 “21. A foreign currency transaction shall be recorded on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate between functional currency and the foreign currency at the date of transaction”

Summary: Export sales to be recorded on the date of Shipped on Board mentioned on the Bill of Lading. The exchange rate, prevailing on the date of Shipped on Board to be used for conversion of amount into INR.

Rukmani Shankar

CA Job

27 Points Joined April 2013

If the amount received short is due to Client paying less, then discount. If it is bank's chargea, then the respective account.

Handling forex gain/ loss is a separate thing all together that needs looking into forex market. Depending on your exposure and need, different strategies can be used.

Contact for further hedging details if needed.

dedeepya reddy

STUDENT

21 Points Joined December 2013

how to account in tappy erp 9 if foreign currency purchased'''''can u please explain

Parita Degda

2 Points Joined December 2020

FOREX TRANSACTION MODEL

We Purchased few items from another country using currency as USD, for the Shipment we have to pay them Advance , so Advance is paid by our bank in INR , how to record the same & also guide about the unadjusted forex gain/loss which appers in a vendor ledger