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of <h1>ICDS VI: Treatment of Foreign Currency Transactions, Financial Statement Translation, and Forward Exchange Contracts Explained</h1> ICDS VI addresses the treatment of foreign currency transactions, the translation of foreign operations' financial statements, and forward exchange contracts. It aligns with AS 11 and Ind AS 21 and focuses on initial recognition, conversion at the end of the year, and recognition of exchange differences. Foreign currency transactions are recorded in Indian currency at the transaction date's exchange rate, with options for average rate usage if it approximates the actual rate. Monetary items are converted at the closing rate, while non-monetary items use the transaction date rate. Exchange differences on monetary items are recognized as income or expense, while non-monetary item differences are not. Forward exchange contracts' premiums, discounts, and exchange differences are treated as income or expense, excluding those for trading or speculation. Transitional provisions apply from April 1, 2016, with no specific disclosures required.
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