Applicable exchange for booking of imported materials

[Bhairob Chandra Bor]

Dear Exparts,

A) Facts: 1) we are importing Raw Materials from Japan on regular basis. 2) 2-3 three shipments are coming every month.2) Payment terms of that materials 120 days from the Bill of Lading date (usance Letter of Credit for 120 days). 4) Transit period from Japan to our factory, Gurgaon 30days approx. 5) We have taken the exchange rates from the RBI website at the time of making the Good Received Notes 6) We have not taken the exchange rates on Bill of Lading date. Though our shipments are on FOB basis.7) Rests of the accounting entries are followed as per AS11.

B) Queries: what rate should be considered at the time of making GRN, is it the rate on Bill of Lading Date or on gate entry date (Enter in our factory)?

Kindly advice

Regrds,

bcb

AI Summary

Company Seeks Clarification on Currency Exchange Rate for Import Accounting: Bill of Lading or Gate Entry Date? A company regularly imports raw materials from Japan with shipments arriving two to three times a month. Payments are due 120 days from the Bill of Lading date, with a transit period of approximately 30 days to their factory in Gurgaon. The company uses exchange rates from the RBI website when creating Good Received Notes (GRN) but seeks clarification on whether to use the rate from the Bill of Lading date or the gate entry date. A consultant advises using the Bill of Entry Rate for recording import consignments in the accounting books.