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Home Acts & Rules Direct Taxes Rules Accounting Standards U/s 145(2) Chapters List Income computation and disclosure standards - w.e.f. AY 2017-18 This
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ICDS - 06 - VI - Effects of changes in foreign exchange rates (w.e.f. AY 2017-18) - Accounting Standards U/s 145(2)

Extract

..... tment 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 reporting the same number of units of a foreign currency in the reporting currency of a person at different exchange rates. (d) "Exchange rate" is the ratio for exch .....

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ICDS - 06 - VI - Effects of changes in foreign exchange rates (w.e.f. AY 2017-18) - Accounting Standards U/s 145(2)

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..... d payables are examples of monetary items; (l) "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; (m) "Reporting currency" means Indian currency except for foreign operations where it shall mean currency of the country where the operations are carried out. (2) Words and expressions used and not defined in this Income Computation and Disclosure Standard but defined in the Act shall have the meaning assigned to them in the Act. Foreign Currency Transactions Initial Recognition 3(1) A foreign currency transaction shall be recorded, on initial recognition in the reporting currency, by applying to the foreig .....

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ICDS - 06 - VI - Effects of changes in foreign exchange rates (w.e.f. AY 2017-18) - Accounting Standards U/s 145(2)

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..... ermined. 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 anything contained in paragraphs 3, 4 and 5; initial recognition, conversion and recognition of exchange difference shall be subject to provisions of section 43A of the Act or Rule 115 of Income-tax Rules, 1962, as the case may be. Fin .....

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ICDS - 06 - VI - Effects of changes in foreign exchange rates (w.e.f. AY 2017-18) - Accounting Standards U/s 145(2)

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..... e on the contract is the difference between: (a) the foreign currency amount of the contract translated at the exchange rate at the last day of the previous year, or the settlement date where the transaction is settled during the previous year; and (b) the same foreign currency amount translated at the date of inception of the contract or the last day of the immediately preceding previous year, whichever is later. (5) Premium, discount or exchange difference on contracts that are intended for trading or speculation purposes, or that are entered into to hedge the foreign currency risk of a firm commitment or a highly probable forecast transaction shall be recognised at the time of settlement. Transitional Provisions 9. (1) All foreign curren .....

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ICDS - 06 - VI - Effects of changes in foreign exchange rates (w.e.f. AY 2017-18) - Accounting Standards U/s 145(2)

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