IND Accounting Standard..foreign trade

Purchases a/c 

Taxes and duties a/c 

To payables a/c 

When you place an over seas order. On the settlement data 

Trade payable a/c 

Fx loss 

Fx gain 

To Bank a/c 

You will recognise fx loss and gain in cos 

If you have purchased warranty, only then you must include it. Since warranty is always a performance obligation and included in the product cost, I don't think it is necessary. 

Intangible assets standard does not prescribe any treatment for warranties or government guarantees. These are contracts with customers and the issuing company will account for it. 

By fx loss 

To fx gain 

My mobile is getting stuck. I don't understand why

Sir

Thanks

Kindly mention AS and IAS and ICAI accounting guidelines, if any.

Rgds

AS 7 

Ias 21

Warranties- IFRS 15 

Ias 10 to capitalise any imoort duties and taxes. This means no need to pay current tax. 

Then any kind of accounting for subsidiaries, the fx difference must be taken to equity. 

Fx revaluations gains and losses as per IAS 10 

Ias 10= ias 16 I don't remember the numbers. I always remember by standard name. 

Dear Yasaswi,

You mention that Warranty is performance obligation and not accounted (Accounted by issuing company only) so my question is if I am a seller for which there is warranty clause mention in Contract so as a seller , do i need to account for warranty provision.

Sir,

As an importer, we are getting 2 years free warranty. Nothing is free actually, it is definitely in -built, in total consolidated price. But as we want 5 years warranty, foreign vendor is separately raising an invoice.

As a buyer, how to account for this intangible assets,,depreciation,, when after 5 years there will be no warranty..so economic life is 3 years. Also customs duty assessment on this warranty?

Thanks in advance

Jayanta

Kolkata

@ Helper

Yes! Provision for warranties is applicable as it meets the definition of provisions.

https://www.mca.gov.in/Ministry/pdf/INDAS37.pdf

Para 22 & 23

@ Jayanth 

The accounting treatment is done by the foreign seller.

you will recognise your product at cost and amortise.

pattern of consumption is used for choosing amortisation method.

Customs duty is added to the asset.

warranty can be any years and asset life can be amortised for three years only. 

Warranty will not impact your financial statements. 

Thanks, Sir.

Warranty will come thru a letter plus Invoice.

How to declare it to Customs?

Should we require CA certificate 15 CA, CB and pay duty? 

Thanks

Assurance type warranties are built in warranties

Service type warranties are usually paid by you for additional warranty can be treated as prepaid warranty and written off when the asset is written off

Post your this query in customs section here