Hi guys,
Need some advice on the following issue.
So let’s say I buy from a Foreigner Supplier an amount of goods worth 250MYR.
I gotta pay some tax (let’s say 10% = 25MYR) but the Supplier helped me pay it alr.
So at the time of receiving goods, I gotta pay him 25 MYR upfront for tax. At this point of time 1 SGD = 2.5 MYR, so I paid him 10 SGD (My Purchase Invoice reflects 100SGD of goods and 10SGD of tax)
Now, 30 days later, I only start paying him the rest of the amount. If I modify the exchange rate then the number is not tally. If I don’t then, my Tax Account is wrong…
Should I use Write Off Amount for this purpose ? Can it be negative cos the fluctuation can be both ways ?
Is there a better way to handle this… ?
Hi Nathan,
We write off the difference of the amount and we have a account in our P&L as Loss/Gain in Forex.
So the balance amount is written off for each transaction. This does get pretty confusing if you have multiple transactions but I guess there is no other way out and I don’t think there would be any option other than that even if we have true multi-currency accounting.
Are you also using this area in Purchase Invoice to make the adjustment ?
Will using the negative write off amount create any problem ?
I think negative write-off amount should not create any problem.
Exactly negative write off amounts don’t create problems but we prefer to use the JV method.
I haven’t really given it a thought as to which method is better, as far as I am concerned its more about the preference.
