Import of fixed assets
This query is : Resolved
26 September 2011
A Pvt ltd co. have given advance for the import of fixed asset on 01/05/2010. the exchange rate on payment date was $44. total advance shown in books comes to 6500*44=Rs286000. The asset of value $6250 actually arrived & was put to use on 01/07/2010.Ex.Rate on that date was Rs/$=44.5. the accountant capitalised the Asset on 01/07/2010 at a value of 6250*44.5=278125.
Is this correct treatment as per AS. kindly reply.
Is this correct treatment as per AS. kindly reply.
29 September 2011
As per AS 11 Effect of changes in foreign Exchange rate Fixed assets should be recorded at transaction date value, so in your case it should be 44 not 44.5 no consideration of put to use.
Kindly let me know whether this solution has solved your query.
Regards,
CS Sumat Singhal
Kindly let me know whether this solution has solved your query.
Regards,
CS Sumat Singhal
13 October 2011
sir,
but fixed asset being a non monetary item should be recorded at the date of transaction. so should i take the date on which advance payment is made as the 'date of transaction'.
but fixed asset being a non monetary item should be recorded at the date of transaction. so should i take the date on which advance payment is made as the 'date of transaction'.
03 August 2023
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