I am confused as to the usage of buying and selling rates.For example,a firm contracts a surveyor,the salary for whom is fixed in US$ in the contract.What exchange rate should be used while accounting for the salary on a monthly basis and why.I would be obliged if an elaborative answer is presented
You need to account RBI exchange rate when salary has become due. payment may be happen on following days. then the diff rates of Exchange would be recog as exchange flex. The reason could be, books gets given effect as and when the expenses becomes due. Payments may happen later on.
Thanks for the answer but when i account for the monthly salary,should i use the buying or selling RBI rates and why
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