Forex Gain And Loss with Example & Tally Workings.

 Forex Gain And Loss with Example & Tally workings.


The forex gains or loss occurs when the transaction happens International sales and receipt Transaction. It is depending upon the value of currency. The value of currency has fluctuated day by day. That’s why the forex gains or loss transaction occurs in the book of accounts. If received amount more than sales invoice, that amount is profit. If received amount less then sales invoice that is loss.

               For example, 1USD is 83.35 INR as per the day 25-04-2024, it is not fixed it might be changed depending upon the country growth and unexpected   disorders. But the forex transaction occurs in the business transactions.

Let see the example for forex gain,

               AI Motors LTD India based company export goods to UAE in Dollar based Currency. The company raised sales order to IS LLC. Item description mention bellow. Amount received 15-05-2024. 1USD 86.50INR as per the date 15-05-2024. 

S.no

Products

Units

Per unit value

INR

USD

1

AI EV Model

15

550000

8250000

98984.30

2

AI DV Model

15

485000

7275000

87286.16

3

AI SV Model

20

625000

12500000

149976.21

Total

50

 

28025000

336246.67


sales order.



sales order copy:



sales Invoice Against sales order:

        







Receipt Details:

                    Amount Received through Bank at 15-05-2024 







Receipt Entry,

    

Bellow Mentioned Balance sheet showing different amount As Forex gain or loss.


 The excess amount transfer to profit account through Forex gain journal against customer.



adjustment entry:

    

Gain Balance sheet


Let see the example for forex Loss,

               AI Motors LTD India-based company export goods to UAE in Dollar based Currency. The company raised sales order to IS LLC. Item description mention bellow. Amount received 15-05-2024. 1USD 80.50INR as per the date 15-05-2024. 

S.no

Products

Units

Per unit value

INR

USD

1

AI EV Model

15

550000

8250000

98984.30

2

AI DV Model

15

485000

7275000

87286.16

3

AI SV Model

20

625000

12500000

149976.21

Total

50

 

28025000

336246.67


    Same like sales and receipt, But amount received less then sales value. $ value is fixed but INR value is fluctuated. The Transection details mention bellow.






Receipt entry for Loss:

    we must change the rate of exchange as the current value ₹ 80.50/-








Forex Loss Balance sheet:

    


Loss Adjustment Entry:

    



    Note: For international transactions (purchase or sales), the same method should followed for Forex Gain or Loss Adjustment.



                                                                                                                            ----------------------
                                                                                                                            Ajith K M.com, DCM.

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