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Hi sir,
Where should we classify the exchange gain or loss arising from income and expenses?
Thank you..
A purchase, for example, will be recorded at the rate of exchange at the date of the transaction – so there is not gain or loss arising on the “expense” but on the settlement of the liability.
Exchange differences arising when monetary items (e.g. a liability) are settled are reported in profit or loss in the period. Whether such gains/losses merit separate disclosure (rather than be included in cost of purchases, for example), I suggest would depend on materiality.
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