Invoice raised in usd

Seniors please reply.................

hey, nobody knows the answer, where are the genius of cci

Dear Shubham,

Revenue has been recognized when Invoice is raised (not issued) to MNC Company. Conversion to local currency is made by the rate prevailing on that day.

Revenue Recognized = $ 16,000*50 =  Rs. 8,00,000

At the time of receipt actual convertible amount received by Private Company. i.e. $ 16,000*65= Rs. 10,40,000.

Therefore Exchange Fluctuation Gain from this transaction is Rs. 10,40,000 - Rs. 8,00,000 = Rs. 2,40,000

Note: It has assumed that revenue and payment is received in same Financial Year.

But the inv

Originally posted by : Samrendra
	Dear Shubham, Revenue has been recognized when Invoice is raised (not issued) to MNC Company. Conversion to local currency is made by the rate prevailing on that day. Revenue Recognized = $ 16,000*50 =  Rs. 8,00,000   At the time of receipt actual convertible amount received by Private Company. i.e. $ 16,000*65= Rs. 10,40,000. Therefore Exchange Fluctuation Gain from this transaction is Rs. 10,40,000 - Rs. 8,00,000 = Rs. 2,40,000   Note: It has assumed that revenue and payment is received in same Financial Year.

But the invoice is entered in the books @ 65/- bcoz that day on which invoice is issued to MNC the USD is @ 65/-........ The Performa Invoice was @ 60/-. We dont enetr PI in books.

Dear Shubham,

Revenue can only be recognized after completion of service I thought service completion date is same as of raising of proforma Invoice.

Date on which conversion rate was 65 is payment date by MNC. Service might have rendered to them before payment.

samrendra sir

what will be the entries?

both of invoice and of exchange rate gain/loss.

thanks

shivani

Dear Shivani,

Revenue can be recognized after completion of services. Assuming Services has rendered by Private limited company after issue of Proforma Invoice (Exchange Rate 50) but before issue of original Invoice (Exchange Rate 60).

Debtor/ Receivable A/c Dr.       960,000

             To Sales                                         960,000

(being services rendered to xyz for USD 16,000 at conversion rate of Rs. 60)

AT THE TIME OF RECEIPT OF PAYMENT

Bank A/c Dr.                 1,040,000

        To Debtor                                       960,000

         To Foreign Exchange Gain          80,000

(being payment of USD 16,000 received from xyz, Conversion rate 65)