Purchases- Imports

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In the case of Import purchases, at what rate the company should recognise it as purchases i.e. goods are purchased on credit basis.

Thanks in advance :)

Replies (2)

Hi Deepika,

I would attempt this in two ways:

1) Where the Purchase order has the freight amount built in - the company should recognise the purchase at its landed cost the rate being arrived from the purchase order, and inventory valuation being done at the weighted average rate

2) Where the PO does not have Freight amount built in, Purchase should be recognised at the PO rate eexclusive of any Freight cost and thereafter, a manual entry for freight would be required to upload the cost in the inventory GL

Hope this is of help

Regards

Abhinav Garg

In case of Import, the Invoice value and the rates are in FC.

Definitely the rate of purchase would beas per the rate defined in the Purchase Order but as concern to the exchange rate for conversion FC to INR. Rate of exchange as per Bill of Entry can be follows.

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