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In forward exchange contract When does premium or discount arise? When does profit or loss arise? When does exchange difference arise? What is the difference between All these? Please explain with examples
Answers (3)
ruchi lahoti
Please refer notes on our 1 Fin App
I referred but I couldn't find what is it actually I could just find the treatment for it
1. The premium or discount, arises by the difference between the exchange rate at the date of the inception of the forward exchange contract and the forward rate specified in the contract. 2. Profit or loss arises upon cancellation or renewal of such forward contract