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TMI BlogEEFC Account- Accounting TreatmentX X X X Extracts X X X X X X X X Extracts X X X X ..... EEFC Account- Accounting Treatment X X X X Extracts X X X X X X X X Extracts X X X X ..... ction. EEFC accounts should be recorded at the exchange rate on the date of transaction. The Company can not account for the payments from EEFC accounts at the exchange rates applicable to receipts without considering the exchange rates prevailing on the dates of payments from the accounts. _________________________________________________________________________ My query is as under. Our organi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sations have EEFC account. If We have made export of 100 USD and We are receiving 100 USD at a time. Against on same day We have import payment from EEFC too, amounting to 40 USD. For E.g. Buy Rate 70, Sell Rate 72 We received from Bank net payment advise for 60 USD*72=₹ 4320. Now, if as per AS respective rates are taken in which bank EEFC account is maintained, Following entries are passed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100 USD*72= ₹ 7200 Receipt 60 USD*70= ₹ 4200 Payment Net Receipt ₹ 3000 However as per payment advise it is ₹ 4320 as with same USD rate payment is knocked off. So whether should be record gain of ₹ 1320 (as per Accounting Standard ₹ 3000 vs. Actual Received ₹ 4320).? Please guide. Also EEFC account needs to be shown separately in Balance Sheet under Cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Bank balance? Reply By YAGAY andSUN: The Reply: In our view it will be counted as foreign exhange fluctuation and will be reported in the B/S accordingly. In the notes to accounts reference of EEFC account will also be mentioned. As per AS 9 on Revenue recognition, you should record the sale transaction in your books as soon as the delivery (with risk & rewards) passes to the customer & the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is reasonable assurance regarding consideration receivable. As per AS 11, a foreign currency transaction should be recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. So you should pass the sale entry on the date of transaction itself. X X X X Extracts X X X X X X X X Extracts X X X X ..... Discussion Forum - Knowledge Sharing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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