We have procured a milling plant under deferred credit facility in CHF currency.Though the plant shall be supplied by the end of the year but the CHF rate seems to be fluctuating to much
If I adopt the rate on the day of txn I may end with a value that shall be "XX" for the capitalisation of the plant but subsequent payments to the supplier is the issue. We shall be paying 6 monthly instalment in CHF so how do we treat the exchange. (since looking at the variation in the CHF rate the variation in expected to be too high).
Can we show it as change in the value of the asset every year or do we treat it as revenue expenditure & write it off. (Though there is no increase in the efficiency of the asset or its productivity )
29 September 2011
well as per as 11 and also as per companies act any of the future exchange fluctuation relating to purchase of the asset shall be charged to Revenue account only
29 September 2011
well the first thing is the CHF compare to EUro will be stable around 1.20 to 1.25. and to INR it will be around 55. So charge it to P&L at the end...
CAclubindia
