Answer Posted / raj
Foreign Currency valuation is used in reporting purpose.
As per accounting Concepts , We have to show expected Losses in report while dawing reports from system for free flow of funds.
FCV is used in all cases Like GL , VENDOR, CUSTOMER cases to calculate expected Loss or Profit...
EX: FCV result will come in 2 ways...
1. Unrealized Exchange gain/Loss
2. Realized Exchange Gain/Loss
Its applicable for Foreign Transactions.
EX : When we Purchased goods from vendor 10 Units @ 50$ * 60 Inr = 3000 Inr
When we run the FCV that time the Dollar value Increased ie; 62 Inr
Ie 100 Rs is the Exchange rate diff that 100 Rs will be UNREALIZED EXCHANGE LOSS....
Entry will be.
DR Unrealized Exchange Loss Acc
CR Balance Sheet adjustment Acc
After Drawing report Well reverse the entry.... Becaus the real transaction lot yet done...
Reversal entry
DR Balance Sheet adjustment Acc
CR Unrealized Exchange Loss Acc
Realized Exchange Gain/Loss:
ex: We Paid money to vendor against invoice...
Exchange rate is 58 rs
200 Rs is Profit for Company.
Entry will be.
DR Vendor
CR Bank Clearing Acc
CR Realized Exchange Gain
| Is This Answer Correct ? | 24 Yes | 0 No |
Post New Answer View All Answers
What is collective processing of gl accounts? : fi- general ledger accounting
What are ‘commitment’ line items in co?
What is a posting period?
Can one chart of accounts be assigned to several company codes?
Hi Can any one Tell me in Detail from Starting Like i have finished the FI Part,now Soon after this How am i going to start the CO Part from where to where & how to link(Just give T.Codes i will understand) and when to Finish. Thanks in Advance.
Explain co automatic account assignment? : co- cost center accounting
What is the main control parameter for settlement?
In movement type(mm), what is value & quantity string? It updates values and quantities in gl with valuation class, transaction key modifier and gl a/c. But how does it work when doing a mvt type?
What is a posting period and how does the system identifies posting period?
I have placed a PO for an item 100 qty Rs.10/Per qty , therefore total cost of the item is Rs. 1000, and this PO Is GR based invoice verification checked. Vendor is sending me 100 QTY but my store keeper doing GRN only for 98, because he is saying that he lost two quantity, so the GRN has been made for Rs 980. Now the vendor is sending me the invoice for total 100 Qty , which is coming to RS.1000 in total. Now you need to do invoice verification for this RS. 1000 to vendor. Will you able to do? If so how? If not why?
Why do you need asset classes? : fi- asset accounting
What are automatically set in the asset masters during initial acquisition? : fi- asset accounting
What is iban number in sap ?
What are non-fixed characteristics or user defined characteristics? : co-pa
How to estimate the Cost step by step ?
