Foreign exchange impact on the income statement Foreign exch

Solution

If the any organization have some foreign transaction and due to this if there is some transaction is pending in balance sheet as on closing than there income statement will effect with any changes in foreign transaction.

Following are the some transactions will affect the income statement,

Foreign currency are fluctuating the daily , so when they fluctuate than our receivable or payable also fluctuates and difference of this is become revenue or losses. If the fluctuation is positive for organization than we show gain from foreign exchange fluctuation and if the fluctuation have negative impact than we have to book the losses for the same.