purchases- Import

 Purchase is to be booked on 1 may 098 i.e when you receive the goods. As per AS 11 which talks only about rate to be applied for a given transaction.

1. When you give an advance the date of transfer of funds is the criteria for recognising it as an advance(Apr 09).
2. When the ordered goods is received then the purchase is booked at the goods receipt date(1/5/09)
3. when you make the payment (if advance was not paid or balance payment) then the date of payment(1/6/09 is the transaction date
4. Difference between purchased rate and paid rate is Exchange Gain or loss which is a P&L Item

whether Accrual method or cash method should be followed to record purchases-imports?

whether purchase should be recorded on

1. Date of payment of advance

2. Date of Invoice

3. Date of receipt of goods

4. Date of full payment for the goods

How would it affect the closing stock in all the above cases

Accural method is to be followed

1 Purchase cannot be recorded on the date of paymnet of advance as goods is not received.

2 Date of invoice is not usually followed because of time delay and it is not practical to book it as we live in systematrised enviraonment or else we have to customise it. it is also an option.

3 Booking the inr at receipt date will be appropriate as everything is trasnsferrred to the buyer.

4 usually diff between bookekd rate & paymnet rate will usually be routed thru P&L A/c.

Closing stock:

AS 11 suggest yopu to book the difference between trans rate & paymnet rate diff i.e Ex gain or loss(realised/unrealised) to P&L a/c . you can also inventorise your ex difference give it as a note.

wat ever be the treatment your profit in the long run not be affected if there is no stock.

if there is stock it will impact to the extent of stock on hand when ex diff is inventorised (i.e) biooking of ex diff is deferred. any way in long run no impact on profit or stock

Date of goods received in India will be date of purchase. But a question arise what will be the date of purchase if first bill of entry filed and goods sent to bonded warehouse and after some days and after payment of duty goods was released by custom authority.

Regards

CA Pankaj Gandhi Jaiswal