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Home Acts & Rules Direct Taxes Rules Accounting Standards U/s 145(2) Chapters List Old - ICDS for AY 2016-17 (Since withdrawn) This
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ICDS - 06 (old) - Effects of Changes in Foreign Exchange Rates - only for AY 2016-17 - Accounting Standards U/s 145(2)

Extract

..... Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent. Scope 1. This Income Computation and Disclosure Standard deals with: (a) treatment of transactions in foreign currencies; (b) translating the financial statements of foreign operations; (c) treatment of foreign currency transactions in the nature of forward exchange contracts. Definitions 2. (1) The following terms are used in this Income Computation and Disclosure Standard with the meanings specified: (a) "Average rate" is the mean of the exchange rates in force during a period. (b) "Closing rate" is the exchange rate at the last day of the previous year. (c) "Exchange difference" is the difference resulting from repo .....

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ICDS - 06 (old) - Effects of Changes in Foreign Exchange Rates - only for AY 2016-17 - Accounting Standards U/s 145(2)

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..... of 1999); (k) "Integral foreign operation" is a foreign operation, the activities of which are an integral part of the operation of the person; (l) "Monetary items" are money held and assets to be received or liabilities to be paid in fixed or determinable amounts of money. Cash, receivables, and payables are examples of monetary items; (m)"Non-integral foreign operation" is a foreign operation that is not an integral foreign operation; (n) "Non-monetary items" are assets and liabilities other than monetary items. Fixed assets, inventories, and investments in equity shares are examples of non-monetary items; (o) "Reporting currency" means Indian currency except for foreign operations where i .....

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ICDS - 06 (old) - Effects of Changes in Foreign Exchange Rates - only for AY 2016-17 - Accounting Standards U/s 145(2)

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..... realised from or required to disburse such item at the last date of the previous year; and (c) non-monetary items in a foreign currency shall be converted into reporting currency by using the exchange rate at the date of the transaction. Recognition of Exchange Differences 5. (i) In respect of monetary items, exchange differences arising on the settlement thereof or on conversion thereof at last day of the previous year shall be recognised as income or as expense in that previous year. (ii) In respect of non-monetary items, exchange differences arising on conversion thereof at the last day of the previous year shall not be recognised as income or as expense in that previous year. Exceptions to Paragraphs 3, 4 and 5 6. Notwithstanding anythi .....

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ICDS - 06 (old) - Effects of Changes in Foreign Exchange Rates - only for AY 2016-17 - Accounting Standards U/s 145(2)

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..... n; (g) sales prices for the foreign operation's products or services are not primarily responsive on a short-term basis to changes in exchange rates but are determined more by local competition or local government regulation; (h) there is an active local sales market for the foreign operation's products or services, although there also might be significant amounts of exports. Integral Foreign Operations 8. The financial statements of an integral foreign operation shall be translated using the principles and procedures in paragraphs 3 to 6 as if the transactions of the foreign operation had been those of the person himself. Non-integral Foreign Operations 9. (1) In translating the financial statements of a non-integral foreign operat .....

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ICDS - 06 (old) - Effects of Changes in Foreign Exchange Rates - only for AY 2016-17 - Accounting Standards U/s 145(2)

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..... ed as expense or income over the life of the contract. Exchange differences on such a contract shall be recognised as income or as expense in the previous year in which the exchange rates change. Any profit or loss arising on cancellation or renewal shall be recognised as income or as expense for the previous year. (2) The provisions of sub-para (1) shall apply provided that the contract: (a) is not intended for trading or speculation purposes; and (b) is entered into to establish the amount of the reporting currency required or available at the settlement date of the transaction. (3) The provisions of sub-para (1) shall not apply to the contract that is entered into to hedge the foreign currency risk of a firm commitment or a highly probab .....

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ICDS - 06 (old) - Effects of Changes in Foreign Exchange Rates - only for AY 2016-17 - Accounting Standards U/s 145(2)

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..... on the 1st day of April, 2015, shall be recognised in accordance with the provisions of this standard after taking into account the amount recognised on the last day of the previous year ending on the 31st March,2015 for an item, if any, which is carried forward from said previous year. (3) The financial statements of foreign operations for the previous year commencing on the 1st day of April, 2015 shall be translated using the principles and procedures specified in this standard after taking into account the amount recognised on the last day of the previous year ending on the 31st March, 2015 for an item, if any, which is carried forward from said previous year. (4) All forward exchange contracts existing on the 1st day of April, 2015 or .....

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ICDS - 06 (old) - Effects of Changes in Foreign Exchange Rates - only for AY 2016-17 - Accounting Standards U/s 145(2)

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