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?


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why is it weird?

Tonykelly |
Tonykelly's picture

Exchange gains

Neil Douglas |

Makes sense to me

Euan MacLennan |
Euan MacLennan's picture


Steve McQueen |
Steve McQueen's picture

Client choice?

Paul Scholes |
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BKD's picture


Euan MacLennan |
Euan MacLennan's picture

there is another point re FX

carnmores |
carnmores's picture

Thanks for the feedback

simplesimon |

More to my question?

BKD's picture


Euan MacLennan |
Euan MacLennan's picture

Not so sure

BKD's picture

I have found this with the new AW

Old Greying Accountant |
Old Greying Accountant's picture

Sensible place for it

zarathustra |
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