I want to know whether imported capital goods should be accounted at exchange rate of BILL of LADING or exchange rate on the date of payment?
If it is accounted at the rate of BILL of LADING, how will be the difference between the two amount is accounted?
dear rounak,
imported asstes should be capitalised on the basis of bill of lading i.e. actual purchase amount any differnec arising aftermath should be transferred to p&L a/c. please go through AS-11 for further information.
my answer is excused if you have poted for para 46 of the AS-11 issued by NACAS
cheers
ganesh agarwala
Dear Ganesh,
Gone through AS 11 and AS 10 both. It is not specifically written in AS 11 that exchange difference for imported capital goods should be transfered to P&L. However AS 10 specifically states that any amount incurred for capital asset should be added to its cost and this gain or loss on foriegn currency is also part of capital transaction. Please clarify my doubt.
Imported Capital Asset should be accounted at exchange rate on the date of payment. Import duty and clearing charges, if any, paid should be added to Capital Asset. No question of gain or loss of forex.
CAclubindia
