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Depreciation

AKSHIT MALHOTRA (C.A Final Student) (1337 Points)

14 October 2013

WHEN DO WE INCLUDE DEPRECIATION IN TRIAL BALANCE IN FOREIGN BRANCH CHAPTER.IN SOME QUESTIONS IT IS DIRECTLY DEBITED IN PROFIT & LOSS A/C & SOMETIMES IT IS CONVERTED FROM FOREIGN CURRENCY TO INDIAN RUPEES N SHOWN IN TRIAL & PROFIT & LOSS A/C.

PLEASE TELL ME .

I'M VRY CONFUSED.

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5 Replies

Abhishek Kumar (student) (371 Points)
Replied 14 October 2013

it is true that the items in the trial balance of foreign branch should be converted into the currency of the head office[as per guidelines for translating foreign currency into head office currency(to be read with AS-11)]. at that case depreciation on fixed assets should be converted at the same rate at which the converted fixed asset is converted and is directly debited to profit & loss a/c.

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AKSHIT MALHOTRA (C.A Final Student) (1337 Points)
Replied 14 October 2013

abhishek if dep is given in additional info.then what will be its treatment.

Abhishek Kumar (student) (371 Points)
Replied 14 October 2013

at first u convert foreign currency in indian rupee and calculate the amt. and then convert as per rate given by foreign currency nd debited the amt. in p/l and show in b/s after deducting frm fixed assets.

Abhishek Kumar (student) (371 Points)
Replied 14 October 2013

at first u convert foreign currency (depreciation working ) in indian rupee and calculate the amt. and then convert as per rate given by foreign currency nd debited the amt. in p/l and show in b/s after deducting frm fixed assets.

Abhishek Kumar (student) (371 Points)
Replied 14 October 2013

if you are using book of prof. amitabha basu - financial accounting then you see the illustration no.46 Of branch a/c chapter i hope it ll be very helpful to u it was also came in [CA Inter November, 1999]

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