03 March 2013
Friends, I have a client who lives in USA. Below is the stiuation and I need to help him find the answer. I am not a CA or a financial wiz but thought would check with you all. Appreciate your quick reply:
A person bought a piece of land in 1996 with his US dollars. The dollar to rupee exchange rate at that time (1996) was Rs 37.50. He converted $175,000 or Rs 6,562,500 and purchased this piece of land. Today, after 18 years, this person is getting Rs 5 crores for this plot.
His questions are: What was his true ROI in Rupees? How to incorporate exchange rate issue? Remember, the dollar to rupee rate then (1996) was Rs 37.50 and today it is Rs 56! He has to bring these funds back to USA. What is the total loss on the exchange rate? What is then the ROI?
If there is some excel sheet you put together, that would help us decide if it makes an sense in selling this plot or delay it further.
This person thinks he has lost money rather than making money and if so I must tell him if it was a true loss or a gain and if so, ow much?
04 March 2013
the owner of plot is an individual ??? and owns a plot or it is owned by the company???? Does the owner of plot maintains the books of accounts and if yes, where does he maintain the books of accounts??? answer these then I may be in position to advise you better.
CAclubindia
