Re: [sap-acct] Problem in asset posting

Posted by Roy B (SAP Financials Expert)
on Jul 4 at 8:55 AM
What do you mean by "accounting standard 11"? I just looked up IAS 11 (IFRS) and it makes no mention of fixed assets or foreign exchange fluctuations. It is to do with construction contracts in progress.

When an asset has been capitalized and brought into use, its value in company code currency is fixed. Foreign exchange no longer applies because an asset will not normally be maintained in another currency. Under US GAAP, FASB 52, assets are carried at historical exchange rates, i.e. that ruling on the date of capitalization. So how can you have an exchange rate fluctuation on an asset that is in service? It simply does not make sense. You either need to look again at your requirement or explain in more detail. Something is not right in what you have so far explained.

Rgds, Roy

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---------------Original Message---------------
From: srinibas sahu
Sent: Monday, July 04, 2011 1:08 AM
Subject: Problem in asset posting

Hi Vidya Dhar,

Thanks for your reply. The purpose of adjusting an asset against an expense is :
As per accounting standard 11, we have to make provision for foreign fluctuation.

suppose on 1.12.2010 asset purchased from A : 5000 USD @ 45
Then on 31.03.2011 the rate is for 1 USD 45.50
So there is a loss of 0.50*5000= 2500
for this we are creating a provision entry as

asset account dr 2500
to A a/c 2500

This is my doubt how to make this entry
Moreover one more scenario is there as

suppose i made a wrong entry as

forex fluctuation account dr

to A A/C

So in this case i want to do a rectification entry as

Asset account dr

to forex fluctuation account

so that ultimately i will get my result.

Please suggest how to overcome the situation.

Thanks and Regards,
Srinivas

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