21 December 2012
A company needs to make membership contribution to an institute outside India of 1000 US Dollars The membership period is from January to December of the Calender year... The invoice date is mentioned as 5th march and received to accounts after closure of books the payment is made in the month of May of the respective financial year...
While closing the entries in the books for March, the outstanding provision has made without considering the exchange rate of Rs.3,75,000/- (April to December) and Rs.1,25,000/- to the expenses (January to March)
After the final payment the outstanding amount was nullified and the balance is booked to the expenses without looking into foreign exchange fluctuations...
Please advise, whether foreign exchange loss to be booked for the above transaction in the books??? Is there any deviation from AS 11
CAclubindia
