By Himanshu V. Kishnadwala
Chartered Accountant
New Page 1INFOSYS TECHNOLOGIES LTD.
— (31-3-2008)
From Accounting Policies :
Foreign currency transactions :
Revenue from overseas clients and collections deposited in
foreign currency bank accounts are recorded at the exchange rate as of the date
of the respective transactions. Expenditure in foreign currency is accounted at
the exchange rate prevalent when such expenditure is incurred. Disbursements
made out of foreign currency bank accounts are reported at the daily rates.
Exchange differences are recorded when the amount actually received on sales or
actually paid when expenditure is incurred, is converted into Indian Rupees. The
exchange differences arising on foreign currency transactions are recognised as
income or expense in the period in which they arise.
Fixed assets purchased at overseas offices are recorded at
cost, based on the exchange rate as of the date of purchase. The charge for
depreciation is determined as per the company’s accounting policy.
Monetary current assets and monetary current liabilities that
are denominated in foreign currency are translated at the exchange rate
prevalent at date of the balance sheet. The resulting difference is also
recorded in the profit and loss account.
Forward contracts and options in foreign
currencies :
The company records the gain or loss on effective hedges in
the foreign currency fluctuation reserve until the transactions are complete. On
completion, the gain or loss is transferred to the profit and loss account of
that period. To designate a forward contract or option as an effective hedge,
management objectively evaluates and evidences with appropriate supporting
documents at the inception of each contract whether the contract is effective in
achieving off-setting cash flows attributable to the hedged risk. In the absence
of a designation as effective hedge, a gain or loss is recognised in the profit
and loss account.
From Notes to Accounts :
Forward contracts outstanding :
