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How to calculate the foreign exchange gain/loss on the foreign monetary assets?

for example if an entity sales goods to a foreign company at credit due to which balance of accounts receivable is raised.Than how we calculate exchange gain/loss?
Example….Presentation currency is K…
Opening balance of account receivable. 100($) ( At this date presentation currency is1$=80k)
Sales during the year at credit 50$ (1$=82k)
Payments received 20$ (1$=82k)
(Payment is received from op.Bal)
Closing Balance 130$ (1$=83k)

Please tell me How we calculate the exchange gain/loss when we translate the balance into presentation currency i-e K….while answering the question please mention the rates used…

Thanks

Asked by: 596 days ago - 1 Answers - 3523 views

1 Answers


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    Hi

    Usually the accounts closing will be made by standardizing the books at a given exchange rate on a particular date.

    In a computerized environment the system will be fixed with an exchange rate and all the transactions will be posted in the system given date.

    I this case I understand that all the transactions are being made at the exact exchange rates. Hence the calculation is as follows:-

    Opening balance (Dr) 8000k – $100 – 80k/$
    Sale (Dr) 4100k – $ 50 – 82k/$
    Receipts (Cr) 1640k – $ 20 – 82k/$
    Closing balance (Dr) 10460k – $130 – 80.46k/$
    Rate on closure 83K/$
    Revised Clo Bal (Dr) 10460k- $126.02 – 83k/$
    Ex Loss $ 3.98

    The calculation goes like this.

    Answer by Panch 449 days ago


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