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Exchange gain and loss
04-01-2009, 05:14 PM
Post: #1
Exchange gain and loss
Dear All,

What are the areas other than payment of liability where we need to calculate exchange gain or loss ?

Regards !
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04-01-2009, 06:01 PM
Post: #2
 
1. Recoveries from foreign debtors / customers (where remmittences were in foreign currency).

2. Payment to Creditors / suppliers involving foreign currency.

3. Foreign currency loans and ther re-statement at each reported date.

4. Mark up on foreign currency loans.

5. Payment of commission to foreign sales agents.

6. Cross border equity or debt instrument offerings.

7. Cross border investments.

8. All other monetary assets and liabilities where foreign currency is involved.

9. Upon accounting for the foreign operations in consolidation.

10. Business combinations and joint ventures.


Regards,


KAMRAN.
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04-02-2009, 09:14 PM
Post: #3
 
Dear Kamran,

Thanks for the knowledge, please help what to do in below case


prepaid.......10..(ex.rate conversion x10)..100
...cash...........10.............................100

<b>Which one is correct ?</b>
(using last week avg. as per company policy for expenses)
expense.......5...(current ex.rate conversion x11)... 55
....prepaid.......5.........................................50
....exchange gain............................................5

or

(expense is recorded at the same ex.rate when prepaid is created)
expense.......5..(same ex.rate at the time of prepaid)..50
....prepaid.......5..........................................50
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04-03-2009, 01:54 AM
Post: #4
 
Dear,

If there had been no difference between the time of recording and actual payment, there should be no exchange gain specially in the backdrop you discussed on the other thread.

Prepayments are only booked when paid.

Regards,


KAMRAN.
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