Foreign exchange gain/loss accounting

This query is : Resolved

Sunilkumar.P.R.

Sunilkumar.P.R. (Querist)
Follow

16 August 2011 My Question is when to account for the foreign exchange gain or loss?. Is it on Purchase/Sales Entry or Payment/Receipt Entry or both?

CA. Vikash Dwivedi

CA. Vikash Dwivedi (Expert)
Follow

16 August 2011 As per AS-11 FX losses on the date of B/sheet trfd to P&L account [difference between Rate on the date of transaction and Rate on the date of balance sheet taken to the P&L Account If transactin is not settled during the year]. In the next year FX difference (difference between rate on the date balancesheet and rate on the date of settlement) taken to P&L account of the year of settlement.
If transaction settled in the same year then FX diff from date of transaction to the date of settlement taken to P&L account.
In case of monetary items.