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Regarding accounting of import invoices

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SHYAM KRISHNAN K

268 Points Posted on 23 March 2022

While booking import purchase , which exchange rate would we consider.

I have mada an advance payment for import purchase at an exchange rate of 60 USD. After one month when the goods was received the USD is 65 in this case for booking of purchase which usd should I consider.

Replies (2)

Quick Summary

This discussion clarifies the correct exchange rate to use when accounting for import purchases. It addresses a scenario where an advance payment was made at one rate, but the goods arrived later with a different prevailing rate. The consensus is to use the exchange rate from the Bill of Entry for accurate purchase booking.

hemant sharma

141 Points Posted on 23 March 2022

Purchase a/c Dr 60
to supplier 60

supplier a/c Dr 60
foregin exchange fluctuation reserve a/c Dr 5
to cash a/c 65

at the end of the year

p&l a/c Dr 5
to foregin exchange fluctuation reserve a/c 5