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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