Hello All,
My Query is about which exchange rate to be taken. A Subsidairy company in india engaged in research work in India for only parent company in USA. There is transfer pricing agreement between both company. Suppose on 11/7/2015 bill of USD 95000/- is raised from Subsidairy company( Serivce level aggrement between both company) to Parent company USA. The Subsidairy has booked the sales entry for service fees receivable as on 11/7/2015 by taking RBI Reference rate 20/7/2015 in its books. The parent company send on 18/7/2015 USD 95,000/- to Indian Subsidairy company EEFC a/c. USD 85 is less received from 95000/- due foreign bank charges. The Subsidairy company in India convert from EEFC A/c to Current A/c the 90,000/ - on 20/7/2015 and balance of 4915 usd on 24/7/2015. So how should subsidairy company accounts payment received from parent company on 18/7/2015 at which exchange rate for USD 94915 usd. AND When Subsidairy company Transfer from EEFC a/c to his Current A/c on different date the USD 90,000/ and 4915/- how to book the exchange loss.