One of my client had opted for the notification issued by MCA and capitalized the forex exchange losses to Fixed Assets.
In Form 3CD clause 11(a)&(b) requires to disclose whether there is any change in method of accounting. I have disclosed the above fact and effect of the same.
Clause 11(d) talks about method of Accounting:
Please clarify whether the above fact consititues a change in method of accounting employed PY according to section 145.
22 September 2009
i think 145 talks about method of accounting ...cash method , mercentile method . capitalization of forex loss , cannot be said to lead to a change in the method of accounting , anyways 145 is only a machinery provision.
A change from one method of providing forex loss to another should be made only if the adoption of the new method is required by statute or for compliance with an accounting standard or if it is considered that the change would result in a more appropriate preparation or presentation of the financial statements,Such a change should be treated as a change in accounting policy and its effect should be quantified and disclosed.
CAclubindia
