Example: The functional currency of a limited company is RMB, and foreign currency transactions are converted at the spot exchange rate on the trading day. According to the investment contract signed with foreign investors, foreign investors invest foreign currency capital twice, and the exchange rate agreed in the investment contract is 1 USD =8.00 RMB. On July 1, 20×6, a limited company received foreign investment of USD 300,000 for the first time, and the spot exchange rate on that day was USD L =7.8 yuan RMB; On February 3rd, 20×7, foreign capital of 300,000 USD was received for the second time, and the spot exchange rate on that day was L USD =7.6 yuan RMB.
Relevant accounting entries are as follows:
July 1, 20×6, when receiving foreign currency funds for the first time:
Debit: Bank deposit 1 1 USD (300,000× 7.8) 2.34 million.
Loan: the share capital is 2.34 million.
On February 3, 20×7, when receiving foreign currency funds for the second time:
Debit: Bank deposit-USD (300,000× 7.6) 2.28 million.
Loan: the share capital is 2.28 million.
According to the Implementation Opinions on Several Issues Concerning the Application of Laws in the Administration of Examination, Approval and Registration of Foreign-invested Companies (No.812006), the registered capital of a foreign-invested company can only use the spot exchange rate on the day when the capital contribution is received, but not the contract exchange rate or the exchange rate close to the spot exchange rate. The corresponding asset account does not use the exchange rate close to the spot exchange rate, so that the foreign currency investment capital will not have exchange differences, and the asset account will still be treated as monetary items and non-monetary items at the end of the period.
Although the amount in the "share capital (or paid-in capital)" account does not reflect the proportion of equity, it does not change the agreed proportion of enterprise distribution and liquidation, which is usually included in the contract.