Exchange Difference

Srinivas Sharma KN (Tax Consultant) (292 Points)

14 February 2008  
How to Calculate Exchange Fluctuation on Foreign Currency Account (Ex. EEFC)? As I understand it, rate at which the transactions are made during the year should be compared with the reinstated rate at the beginning of the year and exchange differences should be arrived. At the every year end, it should be reinstated at the closing rate. I am right? If not, then how?