04 August 2009
which is the relevant rate of foreign exchange rate if a copany hold raw materilas at closing balance sheet date? the purchase price is in foreign currecy and not settleed at closing balance sheet date and our actula cost as per AS 2 is still @ foreign currecny
05 August 2009
As per AS-2 the raw material should be valued at the cost which is incurred to bring it to the current location. As the raw material was purchased in foreign exchange and all the costs incurred is also in foreg=ign exhange so while valuing the stock the exchange rates of the dates when such costs were incurred is to be taken.
Now, the question is at the BS date - no change in rate will be taken into consideration as the cost has already been converted into local currency.
The account not being settled will have effect of exchange rate and thus Debtors will be revalued and the difference in foreign exchange shall be trf to P&L A/c
CAclubindia
