Hi,I have a query regarding the date on which the foreign exchage rate is to be taken.
E.g. Company A(India) pays Commission to the service provider(outside India) at a certain percentage of the revenue raised on a client. The conversion rate as on which date should be taken for the commission recognition in the books? Is it as on the date of the Commission Invoices or the date of revenue invoice raised to the client or on the date when commission invoice is entered into the books?
On the date when commission invoice is entered into the book
when the commission invoice is entered in books of accounts.
and when you will pay the same then consider that date and book fluctuation of foriegn exchange in the books of accounts too.
consider the dat when the comm. invoice has been raise...
peace..!!!
The commission accrues to the service provider when the invoice is raised by the service provider. hence the invoice date is the final date to apply the exchange rate.
jab jab paper easy aaya hai tab tab paper tough checking hua hai!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
CAclubindia
