treatment of forward cover sale

Dear Joseph,

 

Forward contract transaction is covered by AS-11 and not by AS-30.

 

Following are the accounting entries and income booked for 31.03.2010.

 

 





01.01.2010



Debtors a/c -----------------------------------------------Dr.

                   To Sales

(Being sale made)



47,00,000



 

47,00,000





 



 
Dear Mr Manjoj

Thanks a lot for your reply-

somebody  is suggesting AS 11 is applicable only for the forward contracts taken for existing assets/liability and AS 30 isapplicable for future firm commitment/forecast transactions.

since the transation is forecast transaction how to account for as per AS30--

Since AS30 is not mandatory can we close march 2010 accounts without revaluation

Whether auditor has to quality

Pl reply

Joseph David
 



 





01.01.2010



Foreign currency receivable a/c -------------------Dr.

                      To Foreign currency payable a/c

                      To Deffered premium

(Being forward contract entered into)



50,00,000



 

47,00,000

3,00,000





 



 



 



 





31.03.2010



Foreign currency payable a/c------------------------Dr

                      To Exchange gain/ loss A/c

(Being loss on exchange rate accounted for)



2,00,000



 

2,00,000





 



 



 



 





31.03.2010



Exchange gain/ loss a/c-------------------------------Dr

                      To Sundry debtors a/c

(being loss on exchange fluctuation at the year end accounted for)



2,00,000



 

2,00,000





 



 



 



 





31.03.2010



Deffered Premium A/c----------------------------------Dr

                      To Forward contract Premium A/c

(being proportionate gain on forward contract transferred to forward premium a/c)



1,00,000



 

1,00,000





 



 



 



 





31.03.2010



Forward contract premium A/c---------------------Dr

                      To profit and loss a/c

(Being gain booked)



1,00,000



 

1,00,000





 

 

REGARDS,

 

MANOJ