"For foreign currency monetary items, on the balance sheet date or settlement date, the exchange difference caused by exchange rate fluctuations is treated as a financial expense, and at the same time, the amount of bookkeeping base currency of foreign currency monetary items is increased or decreased."
"For foreign currency non-monetary items measured at historical cost, they have been converted at the spot exchange rate on the transaction date, and the original functional currency amount should not be changed on the balance sheet date, resulting in no exchange difference. Because these items have been converted at the spot exchange rate on the acquisition date, they constitute the historical cost of these items. If they are converted at the spot exchange rate on the balance sheet date, the value of these items will change constantly, so the depreciation, amortization and impairment of these items will also change constantly. This is inconsistent with the actual situation of these projects. "
Let's look at what is a monetary item and what is a non-monetary item.
The Accounting Standards for Business Enterprises also explains the chapter on foreign currency conversion, which is explained as follows:
"Monetary items refer to the currency held by an enterprise and the assets or liabilities that will be collected in a fixed or determinable monetary amount. Monetary items are divided into monetary assets and monetary liabilities. Monetary assets include cash, bank deposits, accounts receivable and notes receivable, and held-to-maturity investments. Monetary liabilities include accounts payable, other payables, short-term loans, bonds payable, long-term loans and long-term payables. "
"Non-monetary items are items other than monetary items, such as inventory, long-term equity investment and transactional financial assets (stocks; Funds), fixed assets, intangible assets, etc. "
The above theory means that advance receipts and prepayments are non-monetary items, and there is no need to adjust exchange gains and losses. Why is it a non-monetary item? To judge whether an item is monetary or non-monetary, the key point is to see whether the enterprise bears the risk of changes in the fair value of inventory or the risk of changes in the purchasing power of money due to future exchange rate changes.
Let's talk about the advance payment first. Generally, under the sales mode of prepayment, if the quantity and unit price of goods have been clearly stipulated in the contract and the price and quantity are not adjusted before delivery, the inflow of economic benefits will be completed when the prepayment is received, which indicates that the risk of fair value change of inventory has been borne by the enterprise, not the risk of monetary purchasing power change corresponding to the payment.
The same is true for prepayment. When prepayment is converted into inventory, it belongs to a transformation of asset form. This process does not involve the transfer of risks and rewards in asset ownership, and profits and losses should not be recognized.
Therefore, advance receipts and prepayments are non-monetary items, and exchange gains and losses should not be adjusted.
How to adjust exchange gains and losses of prepayments Prepayments and prepayments are not monetary items defined in Accounting Standards for Enterprises No.65438 +09- Foreign Currency Translation. Therefore, it is not necessary to adjust the exchange gains and losses of foreign currency advance receipts and prepayments at the end of the period, like monetary items.
When prepayments are converted into inventories, or advance receipts are carried forward to income, they should be carried forward at the exchange rate when prepayments are paid or advance receipts are recovered, not at the exchange rate on the day when inventories or income are confirmed.
"Guidelines for the Application of Accounting Standards for EnterprisesNo. 19-Foreign Currency Conversion" stipulates: "Monetary items refer to monetary funds held by enterprises and assets to be collected or liabilities to be paid with a fixed or determinable amount. Monetary items are divided into monetary assets and monetary liabilities. Monetary assets include cash on hand, bank deposits, accounts receivable, other receivables, long-term receivables, etc. Monetary liabilities include short-term loans, accounts payable, other payables, long-term loans, bonds payable, long-term payables, etc. " Non-monetary items refer to items other than monetary items, including inventory, long-term equity investment, fixed assets and intangible assets.
Because prepayments are usually settled by collecting inventory (non-monetary items) with fixed quantity and specifications, prepayments are usually settled by delivering inventory (non-monetary items) with fixed quantity and specifications, that is, the consideration delivered or collected is non-monetary items, and the fair value of consideration is the fair value of the target inventory on the future settlement date, not a fixed or determinable amount, so prepayments and prepayments are not monetary items.
According to the Accounting Standards for Business Enterprises Application Guide No.65438 +09-Foreign Currency Translation, "As the non-monetary items in foreign currency measured at historical cost have been converted at the spot exchange rate on the transaction date, the original functional currency amount should not be changed on the balance sheet date, and no exchange difference will occur". Therefore, at the end of the period, the functional currency amounts of advance receipts and prepayments should not be adjusted according to the current exchange rate.
When prepayment is converted into inventory, it belongs to the transformation of asset form, but this process does not involve the main risks and rewards of asset ownership, so gains and losses should not be recognized, and the amount of prepayment should be directly transferred to the initial measurement amount in the functional currency of inventory.
According to the definition of "income" in Accounting Standards for Business Enterprises-Basic Standards and Accounting Standards for Business EnterprisesNo. 14, "income refers to the total inflow of economic benefits formed by enterprises in their daily activities, which will lead to the increase of owners' rights and interests, and has nothing to do with the capital invested by owners. "From this definition, it can be inferred that the amount of income should be measured according to the amount of corresponding economic benefits inflow. In the sales method of advance payment, the inflow of economic benefits has been completed when the advance payment is received, so the amount of income carried forward by the advance payment should also be determined according to the amount of functional currency confirmed when the advance payment is received (that is, the amount of functional currency converted at the exchange rate when the advance payment is received).
On the other hand, after the enterprise pays the foreign currency advance payment according to the purchase contract denominated in foreign currency or collects the foreign currency advance payment according to the sales contract denominated in foreign currency, the advance payment and the advance payment will no longer face the risk of fair value change caused by future exchange rate changes. This can also prove that advance receipts and prepayments are not monetary items, and there is no need to adjust exchange gains and losses at the end of the period.
Other payables-exchange gains and losses, balance credit, accounts received in advance-exchange gains and losses, balance debit summary gains and losses are generally included in financial expenses-summary gains and losses or need a separate summary gain and loss account.
Finally carried forward to summary profit and loss:
Summary of profit and loss transferred to prepayment account:
Debit: financial expenses-summary profit and loss 37828.23
Credit: accounts received in advance-exchange gains and losses 37828.23
Summary of gains and losses transferred to other payables:
Debit: other payables-exchange gains and losses 47396.49
Debit: Financial Expense-Profit and Loss Summary 47396.49 (red)
Month-end carry-over:
Loan: the profit of this year is 9538.26.
Credit: Financial Expense-Profit and Loss Summary 9538.26 (red)
Supplement to the question:
I'll use it first: Borrow accounts received in advance-exchange gains and losses 37828.23
Lending other payables-exchange gains and losses 37828.23
Clearing accounts received in advance-are exchange gains and losses correct? If yes, what should I do with the remaining other payables-exchange gains and losses credit balance of 9568.26?
At the same time, it was found that there were exchange gains and losses in accounts payable last year, and the credit balance was 28 1093.92. How can we clear it?
Accounts received in advance and other payables can only be carried forward corresponding to exchange gains and losses.
Accounts payable in the previous year also had exchange gains and losses, and the credit balance was 2,865,438+0093.92, which should be adjusted through the profit and loss account of the previous year:
Debit: adjustment of profit and loss in previous years: 28 1093.92
Credit: accounts payable 28 1093.92
Meanwhile:
Debit: profit distribution-undistributed profit 28 1093.92
Loan: adjustment of profit and loss in previous years: 28 1093.92
At the same time, adjust the accounts payable and undistributed profits of the balance sheet at the beginning of the year.
Hello, prepayments and prepayments, Mr. Zou from Accounting College will answer for you.
Advance payment is money paid in advance for purchase.
Accounts received in advance are the money received in advance from sales.
Welcome to give me a nickname-ask all the teachers in the accounting school.
Does the prepayment need to be carried forward to the exchange gains and losses at the end of the month? If prepayments are accounted for in foreign currency, exchange gains and losses need to be carried forward.
Can advance payment and advance payment offset? Hello, I answer your question through online school.
Can't offset each other, because the advance payment is what my enterprise buys from others, and the advance payment is what my enterprise sells to others, which are two different economic businesses.
Accounts receivable and accounts received in advance, accounts payable and accounts received in advance should be presented in the balance sheet.
"Accounts receivable" in the balance sheet is the sum of debit balances of detailed accounts under accounts receivable and advance receipts.
The "advance accounts" in the balance sheet are the sum of the credit balances of the accounts receivable and the subsidiary accounts under the advance accounts.
It should be noted that this list is based on subsidiary accounts rather than general ledger.
Regarding the second question, since the credit balance of accounts receivable is 1000 and the general ledger balance is 5000, the debit balance of other detailed accounts receivable should be 1000+5000=6000. Because only the debit balance of the detailed account is considered when filling in the accounts receivable, the accounts receivable should be 6000, and the credit balance 1000 should be the balance of accounts received in advance.
The same is true of accounts payable and prepayments.
In the financial statements, can the balance be retained in the advance receipts and prepayments? You can keep it, otherwise what is the account left in the report? It is only used to calculate accounts receivable and accounts payable when cash flow is used.
Accounts receivable, accounts payable, accounts received in advance, prepayments and other issues, accounts receivable vouchers, including your invoice, your warehouse receipt, his receipt, your delivery note (signed by the consignee) and sales contract. You don't need an iou. The invoice is proof that you want to collect money.
Proof of accounts payable, including the invoice you received, the receipt of goods you received, the delivery note given to you by the seller and the purchase contract. The invoice is proof that you must pay.
If there is no invoice, you need a debit note or other documents.