adjustment account

[Former Member]

Hi,

hope can reply by point form below.

1)

I would like to ask the balance sheet adjustment account in

F.05 (Foreign currency valuation) and F101(Balance sheet supplement-OI).

The adjustment account is balance sheet account?

2) can i say adjustment account means the account will get reversed in the beginning of following month?

3) adjustment account is clearing or suspense account? or in short a temporary account?

4) the adjustment account will netoff eventually?

5) can p&l account be considered as adjustment account besides balance sheet account?

thanks

[Former Member]

Hi,

answers point by point.

1) Adjustment a/c need not get reversed in the suceeding month.Rather in this foreign exchange diff accounting scenario it is the loss/gain incurred on our receipts and payments to vendors so it is real loss/gain accounted for.

in some instances the diff for ex related to an asset vendor payment it is transferred to asset and capitalised but it necessarily doesnot mean that in all situations it gets reversed.

2) It is not clearing or suspense a/c or temporary a/c but it is the account where the difference accumualtes and then get reversed or transferred based on the business scenario we have defined and needed.

3) the adjustment account will not netoff eventually.

thanks

GB