30 August 2008
hello everybody i am auditing an organisation which deals with foreign currency they use to import goods and after adding their cost & profit sell them, i would like to xplain it with an example:
LET on 1/5/2007 they sold goods worth $100 then the dollar rate was Rs.40(let)
as the customer pay through credit cards bank credit the amount after 3 days then rate let was Rs.39(let)
the problem is that if they book their sale on 1/5/07 their will be loss due to exchange fluctuation and if the rate i mentioned r changed i.e 1/5/07 Rs.39 3/5/07 Rs.40 their will b profit this is not giving me the correct sale figure and this is effecting the profit
30 August 2008
You have to only look whether the sale was recorded in INR as on the transaction date and whether the contracted price in FE was realised. The exchange difference on the date of payment will be either profit or loss due to fluctuation.
CAclubindia
