Accounting standard 11

EFFECT OF CHANGES IN FOREIGN EXCHANGE RATE

1. Accounting Standard-11 Effects of Changes in Foreign Exchange Rates

2. Accounting Standard 11 “THE EFFECT OF CHANGES IN FOREIGN EXCHANGE ” Issued by the Institute of Chartered Accountanats of India Commencing from 1-04-2004

3. Objective The Main Objective is To Prescribe how to include Foreign Currency Transactions in Financial Statement To Prescribe how to include Foreign Operation Transactions in Financial Statement

4. Applicability To the firms who are In Accounting Transaction in Foreign Transaction. Translating Financial Statements of Foreign operation. In Deal with Accounting of Foreign Currency Transaction in the Nature of Forward Exchange Contract

5. Foreign Currency Foreign Operations Forward Exchange Contract Forward Rate Definitions

6. Closing Rate Exchange Difference Exchange Rate Reporting Currency

7. Foreign Operation Types of Foreign Operation : Integral Foreign Operation Non Integral Foreign Operation

8. Recognition of Exchange Differences Exchange differences arising on settlement of monetary items or reporting an enterprise’s monetary items , at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, should be recognised as income or as expenses in the period in which they arise, with the exception of exchange differences dealt with non integral financial operations .

9. FORWARD EXCHANGE CONTRACT  The Contract Entered to Establish the Amount of the Reporting Currency required at Settlement Date of Transaction.  This Contract is Entered to Minimize the Risk of Changes in Foreign Exchange Rate  The Primium or Discount Arising Should be Amortised as Expense or Income over t he Life of The Contract

10. Disclosure in Financial Statement The Amount of Exchange Differences included in the Profit and Loss Account; Net Exchange Differences Accumulated in Foreign Currency Translation Reserve as a Separate Component of Shareholders’ Funds, and Reconciliation of the Amount of such Exchange Differences at the Beginning and End of the Period

11. Conclusion

12. THANK YOU