Sir,
our firm is importing steel scrap on CIF basis from other countries.
Pls kindly let me know how to arrive at purchase price & how to record the same in A/c Books. what are the steps to be followed.Pls reply Sir.
with best regards
MNarayanan
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How to record a import purchase in a/c books
Replies (1)
There is 2 aspects discussed in AS-11 initial recognition and subsequent recognition
Initial recognition means at the time of purchase and recording the same in Books You have to follow the rate which approximates the exchange rate .It can be TT Buying Rate,TT selling Rate,Spot Rate,Inter Bank Rate or Merchant Rate..There is one site called ooanda.com where you get all rates for say 10 years
Suppose at the year end this laiblity is not settled or partially settled then you have to arrive at Subsequent recognition
Subsequent recognition means reinstating the laiblity at Closing exchange rate .The Exchange Difference now is to be shown in the asset or Laiblity side after 1.4.2011 instead of in P&l which was hitherto done
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