Wierd accounting treatment - anyone else come across it?

Whilst out on audit this week, I have come across my client posting FX gains and losses on stock purchases to cost of sales.  Apparently, their previous auditors had insisted on this, but to me it seems bonkers.  Surely, the cost of the goods is based on any exchange rate on the date of purchase, and any subsequent change is an admin expense or gain, purely dependent on changes in exchange rates.

What does everyone else think, before I look stupid for raising it with the Responsible Individual?

Thanks

Comments
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why is it weird?

Tonykelly |
Tonykelly's picture

Exchange gains

Neil Douglas |

Makes sense to me

Euan MacLennan |
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Yup

Steve McQueen |
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Client choice?

Paul Scholes |
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Matching?

BKD |
BKD's picture

Matching

Euan MacLennan |
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there is another point re FX

carnmores |
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Thanks for the feedback

simplesimon |

More to my question?

BKD |
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@BKD

Euan MacLennan |
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Not so sure

BKD |
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I have found this with the new AW

Old Greying Accountant |
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Sensible place for it

zarathustra |
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