Rahul Gupta (Asst Manager Controlling) (50 Points)
18 April 2009Hi,
Can ayone tell me if we should recognise loss on foreign exchange fluctuation on advances paid/received to/from foreign suppliers/custoers on the basis of prevailing exchange rates as on 31st March while finalisation of accounts as per AS-11 or is it limited to only debtor/creditor denominated in foreign currency.
sundharabahu
(chartered Accountant)
(54 Points)
Replied 18 April 2009
| Originally posted by :Rahul Gupta | ||
| " | Reply | " |
As per AS 11( revised), all exchange differences arising w.r.t. monetary items are to be adjusted in income statement subject, of course, to the option now provided for in the recent amendment to accounting standards w.r.t this. There is no reason why the advances against supplies be treated as non-monetary item. Advances are claims adjustable against bills in definite monetary amounts. Accordingly adjustement as per AS 11 for monetary items may have to be followed in the point you raised.
triumph-CMA
(Chartered Accountant)
(503 Points)
Replied 19 April 2009
As per AS 11( revised), all exchange differences arising w.r.t. monetary items are to be adjusted in income statement subject, of course, to the option now provided for in the recent amendment to accounting standards w.r.t this. There is no reason why the advances against supplies be treated as non-monetary item. Advances are claims adjustable against bills in definite monetary amounts. Accordingly adjustement as per AS 11 for monetary items may have to be followed in the point you raised.
Sundharabahu is right
V P Narasimhan
(Accounts Manager)
(791 Points)
Replied 19 April 2009
Normally the following procedure is being adopted by most of the companies. If Forex cover has been made they will open an a/c called exchange lose/gain. Hence, the gain or loss both willbe accounted in the same account depending upon the receipt or payment & its currency value on the date of transaction despite the fluctuation.
Dipendra Raj Panta
(Audit Manager)
(37 Points)
Replied 02 September 2009
Hi,
Can anybody tell me if Advances received towards export of goods, however at the option of importer that suply of godds delayed or cancelled and importer also confirmed that his claim is restricted to INR received by exporter. What should be treatment as per AS 11 or whether AS 11 is applicable or not?
CA munjal
(articled clerk)
(100 Points)
Replied 02 September 2009
If the importer confirms that the claims will be restricted to INR received by the importer, then in such case there is no foreign liabilities and the same will be provided in books in INR and accordingly there will be no foreign exchange gain/loss.
CA Vishal pal
(CA PRACTICE)
(25 Points)
Replied 30 April 2015
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