[Illustrative Checklist] Disclosure requirements under AS 11 | The Effects of Changes in Foreign Exchange Rates
- Blog|News|Account & Audit|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 23 January, 2023
Latest from Taxmann
The objective of AS 11, The Effects of Changes in Foreign Exchange Rates, is to decide which exchange rate to use in accounting for foreign currency transactions and foreign operations and how to recognise in the financial statements the financial effect of changes in exchange rates. An enterprise may carry on activities involving foreign exchange in two ways. It may have transactions in foreign currencies or it may have foreign operations. In order to include foreign currency transactions and foreign operations in the financial statements of an enterprise, transactions must be expressed in the enterprise’s reporting currency and the financial statements of foreign operations must be translated into the enterprise’s reporting currency. This Standard also deals with accounting for foreign currency transactions in the nature of forward exchange contracts.
As per the stipulation of this standard, an entity must comply with the below-mentioned disclosure requirements:
I. The entity shall disclose the following:
(i) The number of exchange differences included in the net profit or loss for the period in accordance with AS 11
(ii) The net exchange differences accumulated in foreign currency translation reserve as a separate component of shareholders’ funds in accordance with AS 11
(iii) Reconciliation of the amount of exchange differences mentioned at (ii) above at the beginning of the period and end of the period
II. If reporting currency is different from the currency of the country in which the enterprise is domiciled, whether following has been disclosed:
(i) The reason for using a different currency
(ii) The reason for any change in the reporting currency
Click Here To Read The Full Story
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
