forward contracts

pls reply

Hi Ankur

Please tell us if it is a Speculative Forward Contract or Non Speculative Forward Contract? Speculative Forward Contract should be carried (either as an Asset / Liability) based on the Forward Rate existing on the reporting date for the corresponding expiry date. (Corresponding Debit / Credit will go to Profit and Loss Account)

Note: This accounting treatment is now covered by AS 30 for all types of Forward Contracts, including Foreign CUrrency Forwards / Futures.

Non Speculative Forward Contracts are to be restated based Closing Spot Rate. 

Regards

Rineesh R

i dont know hw to differentiate between two,

wel i have eg.

Co export its goods on 1st january for 1000$ which is to be received on 30th march, spot rate is 40rs. Now company enters into forward contract for 30 march at rs42, now if i am not wrng co wil book rs 2*1000$ as premium and provide in p/l, now if spot rate on 30 march is rs 44/41/39 then what is the treatment????