Forward Exchange Contract-Gain/Loss

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pfcollect (Querist)
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08 April 2009 Suppose "A Co." has taken Foreign Currency working capital loan of Us$7,40,000 from a nationalised bank and same day/8th July'08 entered into a forward contract @ 44.935 with Delivery date 6th Aug'09.

Us$ rate 31st march'09 -50.53
Forward rate 31st march'09 -51.98

What will be gain/loss as at 31st march'09

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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08 April 2009 Since you have entered into a forward contract the price was fixed at that time itself. The increase or decrease do not matter for you. Therefore gain or loss as on 31st march 09 will not arise.

pfcollect

pfcollect (Querist)
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08 April 2009 Sir,

With respect AS-11?what will be disclosure?

8-7-08 earlier Forward Contract Rate was 41.285.

What will be accounting Treatment?

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