Forward cover for sales

AS 611 views 1 replies

JOSEPH DAVID

GM FINANCE

286 Points Joined August 2008

Dear All

We have a USD forward cover for future sales to be delivered in Feb,2012-Rs-49 per USD-There is no firm asset/liability AS11 is not applicable-Only AS30 is applicable

The rate on 31.12.2011 is Rs.53 per USD-

On 31st Dec closing is it necessary to revalue the forward cover and show Rs.4 per usd as loss in accounts-

Kindly reply

Joseph David

Replies (1)

Kolluru Krishna Murty

Partner

315 Points Joined December 2011

Yes,according to the AS the difference between the transaction day exchange value and the accounting day exchange value has to recognized on the date of closing.

kkm