Foreign currency transactions

This query is : Resolved

MANOJ GIDWANI (Querist)
Follow

31 May 2012 Pls. tell me the treatment of the following problem as per AS-11:-

Suppose a pvt. ltd. co. have import and export business which also sells in domestic market. They import some goods on 100% advance payment. Suppose Rs 50000 (bill raised in foreign currency of $1000 @ Rs 50 per dollar) but actual deliverly of the gooods received later in the same financial year. But at the time of acutal delivery BOE is with Rs 55000.(@Rs55 per dollar) Due to change in exchange rate.So pls tell the accounting entries for this problem and whether their is any gain or loss as per AS-11? If yes pls. also metioned that entries.

CMA Nishad Patkar

CMA Nishad Patkar (Expert)
Follow

31 May 2012
It is a gain on account of change in exchange rate.

On the date of Advance Payment---

X pvt. Ltd DR. 50000
To Bank 50000

On the date of Booking of Invoice

Purchase DR. 55000
To X Pvtl Ltd 50000
To Exchange Rate Fluctuate 5000

Message likes : 1 times

MANOJ GIDWANI

MANOJ GIDWANI (Querist)
Follow

31 May 2012 Dear Nishad u'r reply is as per AS-11 or not pls. mentioned? if yes then pls mentioned the paragraph of AS-11 which show the treatment of the above entries.

Upgrade to CAclubindia Pro. Subscribe Now!