JAYANTA KUMAR BANDYOPADHYAY (professional service) (293 Points)
08 September 2021Imported equipment was sent back to foreign supplier under GR waiver for repair. Found design mismatch from ordered item. They will refund purchase price plus customs duty. Both are related party.
Whether indian parent company cum importer will raise export invoice wrt shipping bill or debit note on wholly owned subsidiary. There is some profit element ..to be considered for accounts consolidation purpose per AS ,IFRS.
PL guide
Rgds
Jayanta Bandyopadhyay
Kolkata
8.9.21
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 09 September 2021
Rise debit note, clearing it out of customs will be lesser hectic. Follow your FX translation procedures and I’m not sure about transfer pricing, maybe you can set it to hedge FX fluctuation since it’s your own submarine.
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 09 September 2021
***Raise
**** Subsidiary
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 09 September 2021
Explore transfer pricing options, I’ll research on m this and let you know if I find a solution
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 09 September 2021
FX translation measurements- historical, current, and average valuation. Historical exchange rates may be used for some accounts. Here current and temporal methods needs to be used and first will recognise losses in equity and latter will recognise losses in income statements. Instead, make a deal to return the asset back at the same price without considering inflation and current cost of machinery moments. https://core.ac.uk/download/pdf/268107086.pdf
page 38.
Contact me and let’s discuss if you have any doubts.
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 09 September 2021
100$ sold
500₹ purchased
debit note raised and current FX valued the asset to
75$ sales return
525 purchase returns
now they have to pay more money plus asset value is lost. Currently, so, record the same value on returns
100$ sales return
500₹ purchase returns
what will happen if this happens before year end? Nothing will happen because these are intragroup sales. Please enlighten me if someone has that knowledge.
CAclubindia
