Hi,
Please find the following example of forward contract and advise whether the funcationalities explained is possible in Treasury Module.
Eg:
Company has taken a loan of 1,00,000 USD on 01.01.2009 ,which has to be repaid on 30.06.2009.Against which it has entered into a forward contract to mitigate the risks
Exchange Rates INR/USD is as below:-
Period 01.01.09 31.03.09 30.06.09
Spot Rate 45 47 52
Forward Rate(for 6 Months) 48 - -
Forward Rate(for 3 Months) - 51 -
The entries for the forward deal would be as follows:-
On 01.01.2009:-
1)Entry passed for entering the forward exchange contract:
Foreign Currency receivable A/c Dr 45 Lakhs
Deffered Premium A/c Dr 3 Lakhs
To Amount payable to Bank 48 Lakhs
On 31.03.2009:-
2)Entry passed for amortisation of proportionate premium on forward contract for 3 months
Premium A/c Dr 1.5 Lakhs
To Deferred Premium 1.5 Lakhs
3)Entry passed for booking exchange gain (47-45)
Foreign Currency receivable A/c Dr 2 Lakhs
To Foreign Exchange gain 2 Lakhs
On 30.06.2009
4) Entry passed for amortisation of proportionate premium on forward contract for 3 months
Premium A/c Dr 1.5 Lakhs
To Deferred Premium 1.5 Lakhs
5) Entry passed for booking exchange gain (52-47)
Foreign Currency receivable A/c Dr 5 Lakhs
To Foreign Exchange gain 5 Lakhs
6) Entry passed for amount paid to bank for settlement of forward contract
Amount payable A/c Dr 48 Lakhs
To Bank 48 Lakhs
7) Entry passed for valuing amount of forign currency @ spot rate
Foreign Currency Received A/c Dr 52 Lakhs
To Foreign currency receivable 52 Lakhs
Thanks & Regards
Ramesh Nair