HI......
Can Anyone tell me the correct treatment of Exchange Fluctuation on
Payment for Purchase of Fixed Assets from outside
or
repayment of loan taken in foreign currency for purchase of Fixed Assets from outside India
as per Companies Act (SchdVI & AS-11) as well as Income tax Act(Section 43A)?
Abhinav Agarwal
(M.Com C.A SAP Consultant)
(814 Points)
Replied 02 March 2009
As per Companies act, the ECF to be added/Substracted from the asset value.
As per As11, it need to be charged off to P/L Account immediately.
There is a big controversy between these two. However, Companies Act always gets priority over AS.
sudarshan
(CA)
(745 Points)
Replied 02 March 2009
Loan taken for purchase of fixed assets , exchange fluctuation need to be charged to P&l account as Government adopted AS11 in AS rules 2006.
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