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Foreign Exchange Gain/ Loss not recognised
Financial Reporting
Hi sir 1.We are not recognising Exchange Gain on Inventory in Consolidated Fs because it's a non monetary item? Or is it as per Ind As 2. So applies only for inventory? 2. We are not treating the 24 lakhs as an exchange gain from Monetary item called Receivables, since 1020 of Receivables cancelled against 1020 of pavables and respective exc loss or gain will get cancelled. Is this correct understanding sir? (Time stamp:12:50) Video Details ------------- Ind AS - CA Final Ind AS 21 The effect of changes in Foreign Exchange Rates #19. Illustration 11
Answers (1)
1. In the consolidated financial statement we carry inventory at cost to group or NRv whichever is lesss (consolidation principle. Any unrealised profits are eliminated). IF we translate the balance sheet of subsidiary , Inventory would be valued at closing rate (lf goods were purchased from a third party). however, in this case, goods were purchase from parent so in group books, the profits are eliminated. 2. Correct.
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