Question ID :
EEFC Account- Accounting Treatment
As per AS 11, ICAI Compendium of Opinions, Vol XXIX,all transactions whether involving receipt of foreign currency or payment in foreign currency, should be recorded at the exchange rate as on date of transaction.
EEFC accounts should be recorded at the exchange rate on the date of transaction.
The Company can not account for the payments from EEFC accounts at the exchange rates applicable to receipts without considering the exchange rates prevailing on the dates of payments from the accounts.
My query is as under.
Our organisation have EEFC account.
If We have made export of 100 USD and We are receiving 100 USD at a time.
Against on same day We have import payment from EEFC too, amounting to 40 USD.
For E.g. Buy Rate 70, Sell Rate 72
We received from Bank net payment advise for 60 USD*72=Rs 4320.
Now, if as per AS respective rates are taken in which bank EEFC account is maintained, Following entries are passed.
100 USD*72= Rs 7200 Receipt
60 USD*70= Rs 4200 Payment
Net Receipt Rs 3000
However as per payment advise it is Rs 4320 as with same USD rate payment is knocked off.
So whether should be record gain of Rs 1320 (as per Accounting Standard Rs 3000 vs. Actual Received Rs 4320).? Please guide.
Also EEFC account needs to be shown separately in Balance Sheet under Cash and Bank balance?
Jan 27, 2020