ACCOUNTING FOR DIFFERENCE IN FOREIGN EXCHANGE RATES

[S.C. WADHWA]

A Company had given advance of USD 5000 towards purchase of machinery from China.

Advance is given dt. 12/02/14.

Remaining payment of USD 15000 is made on 15/04/14 and machinery is imported dt. 14/05/14.

Please advice how foreign exchange difference will be dealt with as on 31/03/14.

AI Summary

Guidance Sought on Accounting for Foreign Exchange Differences as of March 31, 2014, According to AS-11 A company advanced USD 5000 on February 12, 2014, for machinery from China, with a remaining USD 15000 paid on April 15, 2014. The machinery was imported on May 14, 2014. The query seeks guidance on accounting for foreign exchange differences as of March 31, 2014. The response advises consulting Accounting Standard 11 (AS-11) for guidance on handling such foreign exchange differences.