Dear Champions,
Implementation is in process for a Middle-East client! They follow IFRS…
Requirement :
Purchase Order issued to Foreign Vendor(EUR); prepayment made in (AED) to bank as fund transfer. The order is for a machinery but it should come part-by-part (i.e. gen-set). Shipment receives in CWIP Machinery account. Multile-Line purchase order for each machine id. Last Shipment arrived and final settlement need to process and at the same time CWIP should be converted into Asset. As per IFRS the final exchange loss/gain should be adjusted when capitalising.
Example:
Advances
Rate EUR AED
4.782000 1,000.00 4,782.0000
4.783372 1,200.00 5,740.0464
4.788647 1,700.00 8,140.6999
5.066855 1,500.00 7,600.2825
5.066855 1,000.00 5,066.8550
Total 4.895294 6,400.00 31,329.8838
Total Order Value is EUR 20,000.00
Final Settlement
Amount (Remaining) Exchange Rate
13,600.00 5.60 76,160.0000
How to calculate exchange loss/gain in this situation and how could I take exchange loss/gain when capitalising.