Re: Credit note in Foreign Currency

[PONNADA B K RAVIKUMAR]

We are importing soup in the month of april’10 and May’10 the Exchange rate in these months are Rs.43 per Euro and Rs.43.60 per Euro and accounted , after that these two consignments are rejected, so we got the Credit note dt 30.04.10,but we received in the month of Sept’10, so which rate we have to account this credit note

[CAGOPALJI AGRAWAL]

The date of credit note or month of receiving is not so important as the date of crystallisation of claim. The transaction should be recorded on the date on which the claim becomes certain.

[PONNADA B K RAVIKUMAR]

so what rate i have to account this credit note, whether @ 43 or 43.60, pls confirm sir

AI Summary

Crystallisation of claim governs exchange rate for foreign-currency credit notes, not the credit-note or receipt date. The applicable exchange rate for a foreign currency credit note must be the rate prevailing on the date the underlying claim crystallises; the credit note issue date or the date of receipt is not determinative for accounting recognition.