Accounting Standard (AS) 11 - The Effects of Changes in Foreign Exchange

Rates

Table 1: In case of integral foreign operations-

Treatment of
Revaluation on
Item type Examples exchange
reporting date?
differences
Cash, Bank balances, Carried to P & L
Monetary Items At Closing Rate
Receivables, Payables account
Non- Fixed assets No revaluation. Carry
No exchange
monetary historical (depreciation), at historical
differences.
cost items inventories, investments transaction rate
No revaluation. Use
exchange rates that
Non- monetary fair Inventory stated at net No exchange
existed when fair
value items realizable value differences
values were
determined

Table 2: In case of Non-integral foreign operations-

Treatment of
Revaluation on
Item type Examples exchange
reporting date?
differences
Cash, Bank balances,
Monetary Items At Closing Rate All exchange
Receivables, Payables
differences are
Non- Fixed assets
accumulated in
monetary historical (depreciation), At Closing Rate
Foreign Currency
cost items inventories, investments
Translation Reserve
Income and account in Balance
Exchange rate on date
expense items of Revenue, Cost of goods Sheet, till disposal of
of transaction (or
non-integral sold the net investment.
Average rate)
foreign operation