Exchange difference arising on purchase of Fixed Assets should be charged to P/L as per AS11. But should be capitalized as per Schedule VI. Hence we should be following the statute.
Is there any recent updates in Companies Act which makes it in line with AS11? If so please give me the relevant circular number or section reference to it.
Note: There's no forex borrowings. Hence AS16 is not applicable
Please refer to Companies (Accounting Standard) Rules 2006 in MCA website. You would find the link to AS11. In the said AS, refer the foot note on page 114 which reads as follows
"It may be noted that the accounting treatment of exchange differences contained in this
Standard is required to be followed irrespective of the relevant provisions of Schedule
VI to the Companies Act, 1956".
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