my co has purchased certain fixed assets from china. Cost was $ 500000. We paid 30% in adv. and balance 70% was paid through LC after 3 months. pls explain how to account for these entry. at what cost asstes shoudl be capitalised as rate of $ was changed at each transaction day.
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Accounting for fixed assets
Replies (2)
you should account each transaction at the SPOT Rate (on the date of transaction) itself.
And difference in the value of creditors (of the asset) is transferred to P&L a/c.
agree with ashish
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