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Forward contract cancellation loss

Indian Accounting Standards 1377 views 1 replies

In case of a corporate entity  , who take a forward contract to hedge the risk of future export proceeds, subsequently the said forward contract has been cancelled  what is the treatment of forward contract cancellation loss?

According to revised schedule vi the same is reported under finance cost which contain 3 sub – heads 1. Interest expense, 2. Other borrowing cost and 3. Applicable net gain/loss on foreign currency transactions and translation

Weather the said loss reported under other borrowing cost as bank charges or under Applicable net gain/loss on foreign currency transactions and translation as exchange loss. Is it treated as Transaction loss or otherwise ?

Replies (1)

in my opinion , the cancellation charges on forward contract shall be accounted under other borrowing cost . 


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