[Music] Hello students, today we are doing accounting standard 11. It is a very important accounting standard, read it carefully, okay and we are approximately [Music] Change in foreign exchange rate, if we increase K in foreign exchange, reduce it in foreign e. How to convert that e to Indian e, how to incorporate whatever difference will come in it, we have to see in this standard, the standard deals where foreign e transactions take place and what is the object of photo, then this standard wi
ll be applicable if we convert foreign e. This accounting standard is going to tell us what method we will adopt to convert rupees into financial statements of India and convert its financial statements into financial statements of India. This statement also deals with accounting. But foreign e-transaction in the nature of forward exchange contact, if we are doing forward exchange contact then it is applicable there also, now it raises the question what is forward exchange contact, so let me exp
lain to you first what is forward exchange contact, see now . You are worried that you don't know what will happen to the dollar rate after 3 months because if the dollar rate continues to strengthen on the dollar premium then you will incur a loss of 85. You are afraid that after three months it becomes 90. So how much will you lose from today 10000 * 85 0000 * 85 From today you will lose 850000 but if after 3 months it becomes 90 which you are expecting then you will lose 50000 from 9th. What
can you do for that, you can go to the bank, make a forward contract with the bank and tell the bank that I need ₹ 10000 after 3 months, tell me what price will you charge for it, but when is this counting standard applicable? Accounting standards will not give you any opinion as to which currency or rupees or dollars in which you have prepared your financial statements. Any enterprise normally uses the country in which it is domiciled where the company was born . Generally company financial sta
tement is prepared in different E D standards of this country . This standard deals with presentation in your photon E and D transaction of way of modern operation which was addressed in these three casual statements. So if we have any business in foreign operation India or any we have India transaction which is in foreign e then how should it be present in cash flow for that and accounting standard told us to deal with exchange difference arising from foreign e boring you D Exchange date they a
re recorded in adjustment to D Interest First, if we have taken a loan in foreign country and the interest to be paid on that loan, what will be the treatment of the difference in forward exchange rate, that too we should follow this accounting standard. We are going to tell you the rest treatment of enterprise financial statement definition. The definition is quite standard which is going to be there like what is the forward rate. I told you right now in the example that one red today is propos
ed to be 85 of the dollar if the establishment is done with the bank. If we adjust the specified future date on the agreement, how many rupees will we have to pay in exchange for the dollar after 3 months? What is the rate at which we have to pay? You reduce it to Subsidiary where more is 50% Associate or more than 20% Join Venture or Branch Activity of Reporting Enterprises Which are based on which Reporting Enterprises I am a reporting enterprise My business is reporting Financial Statement In
dia In rupees, whatever is less outside India, whether it is my subsidiary company or a joint venture, whatever opportunity is outside India, we will immediately call it an operation, after 3 months, take it from us at the rate of ₹ 10000 86. I am an integral operation reporting enterprise. My company is XS Limited in Delhi, there is no one in it and it is in this way that this is a part of my business, what will we call it as integral foreign operation, how will I know whether to take a loan fr
om me or will I say that you are my heart? If there is a lot of control over my business , let us understand it carefully. It is written here that if there is any change in the exchange rate reporting e and local e means Malia. Reporting is in dollars and in local dollars. Direct impact on president and future cash flows from operations of other non-integral foreign operations and not reporting on operations because it is not directly like I have a business like studying in a branch. Whatever go
ods I buy from me will go through me, there is a lot of dealing going on with each other and the effect also has to be studied in the cash flow and the difference in exchange rate between reporting e and foreign e makes a difference. But if it is a non-operating, non-integral foreign operation, it is separating itself, it does not have much to do with us, you are buying goods on your own, selling goods on your own, taking loans on your own, it will not make any difference because each set of But
there is no difference in the post, it does not have much relation with Monty and normality and others, hence it is written that it is only our net investment, which is our net investment in business, there is nothing else other than that, net investment is not in non-integral operation. Now let 's talk about when to record e-transactions, on which value, then recording transaction on initial recognition. Initial recognition means on which value we will record it for the first time. When the tr
ansaction arises in N. When will there be an enterprise and their e- transaction? When will we buy or sell any society or provide services in foreign e-commerce? For example, if I bought goods in that dollar, took any service in that dollar, then what kind of foreign e-transaction did we contact, did we give any such but in the example. I am in India today, I exchanged 10000 dollars with him for 25 rupees. Today the rate is $1, it is equal to 92. In such a situation, the initial recognition will
be 10000 * 92, which is the exchange rate on the date of transaction. We will do that if the rate is There is not much change and you have very few transactions, so what can you do ? You can calculate the difference rate which is the average of the monthly weekly action rate on all those transactions. See what happens on a daily basis . The rate is changing sometimes. Sometimes it is 92, sometimes it is 91.9, now it is 92.2, so if there is not much fluctuation, then we can take the average of o
ne month or one week, but if there is a lot of sequential change, then this is what the accounting standard says or the effect is bought and our The rate is written as per 92. Transactions are classified into monetary and non-monetary items. 180 items are assets and liabilities. Give others. What are the monetary items which are fixed in amount. It is like this. Creditor is done, Cash is done, Bank is not in balance , Like if Assets are done , then what will we do on each balance sheet. Should w
e write down the monetary item on closing date ? Historical cost denominator using: D. Exchange rate. D. Date of transaction. Purchased or purchased on G day. The rate he had that day is the date we should take it to convert it to normality but it must have been given, otherwise take the opening brother, if you want the oldest one then it is written and what is condition liability? Condition liability is one such thing in cotton E which We should disclose from the closing date itself. Now what w
ill be the problem that we are doing different radios to transfer different things, so what will we do with the difference of exchange that will come, then it should go to income or expense, this means. If at any time we have purchased any asset or written down any value, after that there is any change in the rent [music] then it is clear that the amount or whatever loss will be incurred, even if it is not incurred, but we will transfer it to our account. We can make these differences but if it
is a non-integral business then we can make this difference by e- reserve e-translation on first January for Rs. 15000. Time rate is Rs. 75 and exchange rate is also given on March 31st and payment is on seventh day. Sometimes a date is given to us for 2 years, we have to tell different information as to what value we should initially recognize it, then the date of 25 11 15000 25000 1125000, okay now our date will come on 31st March, this is what we have, that is ours. non integral written right
here What will we do for the loan? We will apply whatever is available. For the monetary items, we calculated the closing date and for the normal items, we calculated the fed value on the day of loan and then did not mention anything about the value. It was Rs. 15000 and by accident, it was given on rent. And the date of payment is that payment is made by you to the creditor, there is a big discussion about the creditor and what are the creditors because if it is a stock then the value of ISRO
is 74 , by the way 110000 15000 , after this the date of payment will come. We will have to pay Rs 73,000 , so here we have made profit because we have reduced the payment. What did we think, we will have to pay Rs 11,10,000 but we paid only Rs 10 lakh, so this is the profit we made earlier also. Because our liability was already a profit, this profit happened Question number 3 Exactly in that dollar one lakh transaction 12 so the initial which we will recognize from the date of this day is 1000
00 * 4 and then we have this monetary asset on this day this On closing date our value has increased [Music] According to Audition Pandit 895 which is 6000 less than our old balance Transfer One Crore 43 Lakhs We will initially recognize it as Purchase Account So the payment we have made is 7000 If you make extra payment then the loss will be Rs 7,000 and it will be eliminated. Further it is written that what we have purchased till now has been written and whatever is our stock will remain the s
ame. One more question. Like before, we have purchased the goods. Initial recognition has been done on 11th 2010. Rs. 10000 * 45 In this 44 I made a profit of 10000 [Music] I had to pay 30000 while I had to pay 40 on the book value of my asset's liability 4:30 So I made a profit of 10000 I made a profit of 10000 2019 Statement Of foreign operations depends on the way in which finance and operates in relation to reporting and pricing for this purpose and whether it will be integral or non-integra
l, accordingly we will have to do complete conversion, assets and liabilities will have to be changed accordingly [ Sangeet] Extension of D reporting and price operation is a next part of our business, it is our integral business but for example in D country of foreign operation, it has almost immediate effect on D reporting and cash flow so its immediate effect comes and integral. Give immunity factor in business D reporting and price investment So what have we learned which was written earlier
also, if our business is integral then what is written about investment then no effect and minor effect. If investment is business then its effect is written in contrast and non integral operation. Cash and other monitor items expand their generating comments which is substantially in its local e to Jharkhand's business, where the head comes and also entertains [music] Now this is how we change the assets liability of the business Translation have head bin entered These include D reporting ente
rprise itself D cost and debit of measurable fixed asset is translated using D exchange rate at D date of purchase and IF D asset is credited fair value and other similar valuation using D rate on D date of evolution then what will be the valuation? Purchased, he will get the day rate till the cost of inventor will translate it, translate value and de recoverable amount and net will be applied on this available date because either I have told how the stock is fine, branch in that, everything is
running in dollar here, head office India. I am running an integral business in Rupees, so whatever monetary item changes on the closing date, it is something like this: Now there is a head office account in the branch, there is a branch account in the head office, so when Both will be in the head office. There is no need to convert the head office account from any date because we know that it will be the same balance as the account. If there is a balance then what will we write here as branch a
ccount ? So here we will do it from this date. Salary and Wages are our expenses which happen throughout the year. Expenses which happen throughout the year are expenses so income. Let us change it with the average rate of the whole year. If the opening stock is the value of the beginning of the year, then we will change it from the opening date. If nothing is said from the closing date, then we will change the purchases from the closing date. Because we would have purchased the goods in the reg
ion throughout the year. The closing tax amount is 180 items, at what rate, so we can make a summary of the income and expenses, average long term assets and liability in capital and tell the balance in dollars. Tell us the rate. So we have to convert the branch which is our building in Washington 180. Here again we will make a copy and write the amount, building building, we will apply red and we have got 60 commission, we will have got the average for the whole year, 134, we have to convert th
e address closing date in Indian Rupees. Converted it into Rupees and one more item. Now let us talk about how to convert Non Integral Foreign Operation. Now we had also seen how to convert Integral Foreign Operation. How to convert Non Integral Foreign Operation to Non Integral Foreign Operation. In a way, he is a part of our business, but he is so independent that he does his own transactions. In a way, it is as if he is our obedient son. He is integral. He obeys us. He is not married yet and
after getting married, his wife's If you agree to say that it has been taken out of our hands because it has been taken out of our place, we have no say, then it has become an independence, so independence is like this , how will we do the non-integral operation, we are talking about income and for non-integral business. The difference in Expense Sold B Translated Aate D Date of D Transaction Difference is transferred to PNR whereas here Foreign E Translation Reserve is transferred and for pract
ical reasons you translate Income and Expenses, this is our point, we will take it from the closing date because Basically goodwill capitalism corporation financial statement and non integral foreign operation in both reporting entrance full normal consolidation procedure suggest elimination of intergroup balance and intercourt transaction of d subsidiary ho ever n exchange one intere balance tu convert one e in andar one kuch else hai aisa hai As far as the final level is concerned, there is co
nsolidation for that. This is not a discussion for you right now. It is a matter of finality. It is mentioned in it that there are inter group balances, like we have maintained our holding company, we have given loans, so for them. It has been said that there are inter group transactions, reporting to them and price reporting from head office, the enterprise is making the balance sheet on March, in the branch which is there, it is made on 31st March, it has to be made on 31st March also, note tr
anslation minority interest is written that when non Integral Form Operation is Consolidated What is it Note Holy Interest Minority Interest means if we have 80% share then the 20% who are there are called minority interest, so you people do not have to take any confusion or tension, this is not for you. Disposal Office interest in the enterprise may be interspersed with non integral foreign business which is our business Non integral D Payment of dividend form part of disposal only when it is c
onstituted Return of D Investment remittance from a non integral foreign operation Highway Profit Tens Note Form Part of D Disposal Unless it is Considered Return of D Investment So in the section of sale we are telling that what is the money we get when we sell the investment. In this form of partial disposal only d proportional share of d related. Accumulated Action Difference D Following R Indicator Indication The A Foreign Operation Is A Non Integral Rather Than The Integral Wealth D Reporti
ng Employees Have Control D Foreign Operation The Activities Of The Foreign Operation Degree Of Autonomy From D Reporting And D Head Office Is The Reporting Enterprises Branch Which is our operation, so it does less by itself, so there is non-intergal inside it, transition with D reporting is not a high proportion to D foreign operation activities, so we are a foreign company which is our branch, there are not many transactions with it and which If there is finance, they take loan etc. on their
own. If there is a branch, they themselves take loan. They do not agree with us, they do not ask for it from us. They get millions of rupees from porn operation cell and other reporting. There is no sale, it is changeable in that dollar, the activity that happens is kept by itself, not they send us, sale price of D foreign operation basis, you change in D actual date but are detention mode by local competition, see the meaning. Let me tell you a very important thing, related to G [Music] will cr
eate itself . Question number is 8 and here we have been given a trial balance in which the values are on debit and credit side and some exchange rates have also been given. We have been told that if the integral If it is a business then tell me what will happen if it is integral. So do you first talk about what will happen if this business is integral? If this business of ours is integral then we would have bought the planter machine on its original date and convert it to Asia date of the day
. So when we bought again, the time date was set to 18, we will change it from 18, the depression will also change from this date, our fixer set will change from G rate, we will change the opening stock from the opening date and that is, if we know the balance then that. 100 thousand, there will be no rate change for this and there is no need to change the branch account because we know the balance, what will come in debit, in rupees and what will come in credit, we are going to know in rupees.
If we multiply, it will be 3600 A. And multiply 130 by 18, 14 and opening stock * 22 and 40 and 123 * 22706 according to which branch's account will be 264 00. Total of debit side will be 3600 1440. Now if we talk about this, if we talk about non-integral foreign. If we consider it as an operation then what will happen is that in a non-integral foreign operation, the stock which is a fixed asset is changed on the closing date. Our fixer set will change according to 24. The depression above it wi
ll also change according to 24. Okay. Which is digital 9017 and 866, the difference that will come here is 2004 difference in the credit side, so the difference is something happening, if it is an integral business, then something was happening, the difference is due to the stock closing, fixed asset and fixed liability, we call it the closing date. Let's access the exchange difference and liability in respect of this initial record. The exchange rate applicable on D date of transaction. We have
already talked about the liability in respect of outstanding payment. This is also the record of D in case we took a loan. If there is a creditor then it will be like this or if there is a creditor then it will be BSC, there will be change in ever weather and liability in terms of money may be taken more, demon can be initially recorded, then in such a situation, if there are addresses, then we will also differentiate the same. Transfer in the angle and what is the company set called schedule t
hird, what does the treatment of D say in this schedule six, which is mentioned in it, you can do it in this different schedule third, you can do proforma which is six, it tells that Liability Regarding Fixer Set Arising Of D Changing Exchange Should Be Adjusted In D Caring Amount Of D Fixed Asset Meaning What Is Mother We Took ₹10000 Its Was Now 81 If There Is Difference In Both So Keeping In View D Difference ICC [Music] This Transaction How will the recording be done, how will we write this t
ransaction? First of all, what will be the value in dollars of what we have taken, because we have taken loan etc. in this, so it is not time, we have bought it, it is time and so much only. If we had taken the loan then what was the loan but how much loss did we incur, the loss was Rs 750, ok transfer it to the account and transfer it to the tap account and you decide the depression you want to put, take 6000, what about 20% ? Is Apply 1350 depression. There is a difference between the two but
both are fine because the accounting standard says that whatever you are doing on the basis of commission is also fine which I have marked in green color as Disposal of Non Integral if you have any business outside India . And from there, we used to put non integral and what happens here, what will we do with it, let us see in the bigger section, classification of operation, translation is applicable, the new classification should be applied from the date of change in classification, which value
will not be the same, etc. That is their cost, if you date it for the day, then we will take the same rate, that is their historical cost and the rest was the exchange difference which is till the disposal of it, maintain it till disposal, what about the rest of the head's taxi fat in the future. We will go through what I told you about future contact, how do we do it, financial instrument which is note intended for trading purpose, amount of reporting e- retirement and available settlement dat
e of transaction, what is there that we can contact any forward exchange. For that we also have to pay premium, this also comes at the final level, now you do not need to take much tension, should be recognized in D statement of standard change, other profit and loss rising on cancellation and renewal expense in short, whatever difference there will be. We have to transfer everyone to the Pendal account. You understand this. Let's move ahead. Question number 10 is Rahul Limited, he has done 25.
Please, his battery was drained in the question. Rahul Limited has done 49.1, so we will do the initial recognition at this rate, it will be ours. And in the article, these 485 plants will be ours, 48 lakh will be Rs 85000, but we talked about the date which will come after 3 months , it will come first , here for one month, next year, how much extra money are those who are going to give 30000 extra, divide it between you and one person. If we give then 20000 will be ours in this air in 2021 a
nd 10000 in 2122 considering the loss and if this is the loss of forward contact, we have seen how it will be recognized, we will put it in the pendal, the extra payment will go to the creditor, this value will remain in the plant and if If we had done this for speculation purpose, then on this rent we see what is the value of this contact, what is its market value and transfer the difference to the PNR account. This is called our forward contract in question number 11. They have bought the phot
o contact for 3 months, its time rate is the rain rate and they have given the date of sale on 31st January. Is it business related? We have bought it for speculation purpose, so what should you do in such a situation. Keep in mind that the market value has been given on this land . If the market value has been given then we will change its value according to the day and will enter it in the profit loss PNR. Otherwise it is not as it is and the final settlement will be done on the first day of D
ecember. What is the rate of time sold in audition.1 In such a situation, they got profit [Music] Profit is made, it is a profit of 8000, it will be transferred to PML account on 31st January, this time will also not be transferred on different basis like We do this related to purchase of any asset if your weather reporting is different from D country in which D enterprises domicile D region is true A difference in bill B disclosure like you are in India but you are maintaining E balance sheet I
f you are not making rupees in dollars then you will have to tell the reason why you are doing this when there is a change in classification of significant on an operation. You will have to tell the nature of change in classification region of change impact of change . In D shoulder fan and in D PMLS and going to be non integral or non integral intelligence presentation of foreign e monetary item translation difference account format which is if this schedule third company definition is added th
en what will happen is the true balance on dewar cannot be reflected in asset. Debit and credit side of balance seat on dewar and residence and Plus show the result but the difference in digital exchange contact can be included in the same cost. In the operation of reporting enterprises, there is no classification of integral and non-integral exchange rate. The one that is integral goes in the panel and the one that is non-integral. Description: If e-translation goes into reserve, then children,
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