AS-11 breather
This query is : Resolved
31 March 2009
There is a news item that AS-11 provision is deferred regarding MTM. Does this apply to only derivatives ? As per AS-11, all assets and liabilities in foreign currency as of year end are to be reinstated at spot rate as of year end rate. Does this undergo a change due to the news item ?
03 April 2009
As per new notification difference between any long term assets or liability foreign exchange gain or loss can be taken to “Foreign currency Monetary item Translation Difference Account”. However since derivatives are not covered any structured financial product may not come under this perview.
03 April 2009
Thanks. Since the amendment talks about " long term asset/ liability " amount lying in foreign currency in trade creditors/ debtors accounts have to be reinstated as per AS-11 as done hitherto .Is this correct ?
03 April 2009
The clarification on reinstatement to be done for balances in trade creditors /debtors , is sought for.
04 April 2009
Trade creditors and debtors are not long term assets or liabilities so as you rightly stated AS-11 will be followed as usual.
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