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Forex Restatement Calculator — Ind AS 21 / AS 11.

Pick the item, and the calculator applies the correct rate — closing rate for monetary items, transaction-date rate for non-monetary items at cost, fair-value-date rate for non-monetary items at fair value — then computes the exchange gain or loss and where it goes: P&L or OCI.

What are you restating?
Item type — this decides the rate
Inputs
Foreign currency amount
The invoice / contract amount in foreign currency
Transaction-date rate (₹ per FC unit)
Spot rate on initial recognition. For advance consideration, the date the advance was paid/received fixes this rate (Ind AS 21 Appendix B).
Closing rate (₹ per FC unit)
Spot rate at the reporting date — RBI / FBIL reference rate is the usual audit source.
Part of a net investment in a foreign operation?
Long-term intra-group monetary item, settlement neither planned nor likely
Restatement table
FC amountRateINR value
Initial recognition1,00,00082.50₹82,50,000
At reporting date
Closing rate
1,00,00085.20₹85,20,000
Exchange gain₹2,70,000
Routing
Profit or loss (Ind AS 21 para 28 / AS 11 para 13) — typically other income / other expenses; forex on borrowings may partly be a borrowing cost under Ind AS 23 para 6(e) to the extent it is an adjustment to interest cost.
AS 11 para 46 / 46A — legacy option
For companies still on AS 11, MCA notifications (2009 and 2011) inserted paras 46/46A permitting exchange differences on long-term foreign currency monetary items to be capitalised into the cost of a depreciable asset, or parked in a Foreign Currency Monetary Item Translation Difference Account (FCMITDA) and amortised. Honest status: this was a time-boxed option whose sunset has lapsed for new items — it survives mainly as grandfathered balances still amortising (Ind AS first-time adopters could carry the policy forward under Ind AS 101 para D13AA for old items). Verify the exact notification trail before relying on it for any new transaction.
Section 43A — income-tax divergence
For tax, Section 43A of the Income-tax Act adjusts the actual cost of a capital asset acquired from outside India for exchange fluctuation on the related foreign currency liability — but only on actual payment, not on year-end restatement. Books restate MTM; tax waits for settlement. Expect a book-tax difference (deferred tax under Ind AS 12 / AS 22) and check the Form 3CD depreciation workings pick up the payment-basis adjustment, not the accounting restatement.
On the audit file

Forex restatement is a year-end journal that auditors re-perform. every closing-rate item, tied out.

CORAA's ledger analysis picks up foreign currency receivables, payables and borrowings from the trial balance and flags year-end balances that don't move with the closing rate — so restatement gaps surface before the file closes.

Keep going

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How foreign currency restatement works under Ind AS 21 / AS 11

Ind AS 21 (and AS 11 for non-Ind AS companies) works on the monetary / non-monetary split. At each reporting date: foreign currency MONETARY items — trade receivables, payables, loans, borrowings, bank balances, anything receivable or payable in a fixed or determinable number of currency units — are translated at the CLOSING rate. NON-MONETARY items measured at historical cost — PPE, inventories, prepaid expenses, advances that will be settled in goods/services rather than cash — stay at the transaction-date rate and are never restated. Non-monetary items measured at fair value are translated at the rate on the date the fair value was measured.

Exchange differences on monetary items go to profit or loss in the period they arise (Ind AS 21 para 28). The main exception: a monetary item that forms part of the reporting entity’s net investment in a foreign operation — in the consolidated financial statements that exchange difference is recognised in OCI (accumulated in the Foreign Currency Translation Reserve) and reclassified to P&L only on disposal of the operation (para 32). In the separate financial statements of the lender, it still goes to P&L. And where a gain or loss on a non-monetary item is recognised in OCI (e.g. PPE revaluation), the exchange component of that gain or loss also goes to OCI (para 30).

Two India-specific wrinkles matter on audits. First, AS 11 paras 46/46A (inserted by MCA notification) gave a time-boxed option to capitalise or defer exchange differences on long-term foreign currency monetary items — now essentially a legacy of grandfathered balances (Ind AS adopters could continue it only for old items via Ind AS 101 para D13AA). Second, income-tax follows Section 43A for imported capital assets: the actual cost is adjusted for exchange fluctuation only on actual payment, so the tax base diverges from the restated book value until settlement.

Worked example — export receivable at year end

An exporter invoices USD 100,000 on 10 January when the spot rate is ₹82.50/USD. At 31 March the closing (FBIL reference) rate is ₹85.20/USD. The receivable is unsettled at year end.

Inputs
Item typeTrade receivable (monetary asset)
FC amountUSD 100,000
Transaction-date rate₹82.50
Closing rate₹85.20
Output
Initial recognition₹82,50,000
Restated carrying value₹85,20,000
Exchange gain₹2,70,000
RoutingP&L — other income
A monetary asset is restated to the closing rate, so the carrying value rises to ₹85.20 lakh and the ₹2.70 lakh gain hits P&L in the year of restatement — unrealised but still recognised. When the customer pays next year, the difference between the settlement rate and ₹85.20 is a further (settlement) exchange difference of that later year.

Common mistakes

Restating advances that are no longer monetary
An advance paid for goods/services (or received from a customer) that will be settled by delivery, not refund, is non-monetary once paid — it is NOT restated, and per Ind AS 21 Appendix B the transaction-date rate for the related asset/income is fixed on the date of the advance. Restating capital advances at closing rate is one of the most common year-end errors.
Restating only realised differences
The closing-rate restatement is mandatory for all outstanding monetary items — the gain/loss is recognised even though unrealised. Clients sometimes book forex only on settlement; the auditor should re-perform the year-end restatement from the FC ageing.
Sending net-investment differences to OCI in the separate FS
The OCI/FCTR routing for monetary items forming part of a net investment in a foreign operation applies in the CONSOLIDATED financial statements. In the lender’s separate financial statements the exchange difference stays in P&L (Ind AS 21 paras 32-33).
Treating para 46/46A as a live option for new loans
The AS 11 para 46/46A capitalisation / FCMITDA option was time-boxed; its sunset has lapsed for new items. What you meet in practice is grandfathered balances still being amortised or depreciated. Do not accept fresh capitalisation of forex on a new ECB on the strength of para 46A without verifying the notification trail.
Forgetting the Section 43A book-tax gap
Books restate the FC liability for an imported machine at closing rate; tax adjusts actual cost only when payment happens. Depreciation per books and per the Income-tax Act diverge, and the deferred tax working plus the 3CD depreciation annexure must reflect the payment-basis figure.

Frequently asked questions

What is a monetary item under Ind AS 21?+
A unit of currency held, or an asset/liability to be received or paid in a fixed or determinable number of units of currency — cash, bank balances, trade receivables and payables, loans, borrowings, lease liabilities. Non-monetary items lack that right/obligation: PPE, inventories, prepaid expenses, advances settled in goods, equity investments carried at cost.
Which rate applies to which item at the reporting date?+
Monetary items — closing rate. Non-monetary items at historical cost — the exchange rate on the transaction date (no restatement). Non-monetary items at fair value — the rate on the date fair value was measured (Ind AS 21 para 23).
Where does the exchange gain or loss go?+
Generally to profit or loss in the period it arises (para 28). Exceptions: monetary items forming part of a net investment in a foreign operation go to OCI/FCTR in the consolidated FS (para 32); and where a non-monetary item’s gain/loss is itself in OCI, the exchange component follows it to OCI (para 30). Exchange differences on FC borrowings can also be a borrowing cost under Ind AS 23 para 6(e) to the extent they adjust interest cost.
What rate should be used in practice — RBI, FBIL, customs?+
Ind AS 21 requires the spot exchange rate; in Indian audit practice the RBI / FBIL reference rate at the reporting date is the standard source for the closing rate. The customs notified rate is for customs valuation, not for financial reporting. Document the source used and apply it consistently.
What are AS 11 paras 46 and 46A?+
Options inserted by MCA notification (2009 and 2011 respectively) allowing companies on AS 11 to capitalise exchange differences on long-term foreign currency monetary items into depreciable asset cost, or accumulate them in FCMITDA and amortise. The option was time-boxed and its window for new items has lapsed — treat it as legacy; balances still amortising should trace back to the original election and the notification trail should be verified.
How does Section 43A of the Income-tax Act interact with restatement?+
Section 43A adjusts the actual cost of a capital asset acquired from abroad for exchange fluctuation on the related FC liability only on actual payment. The books restate at closing rate every year; tax waits for settlement. The result is a book-tax difference in asset cost and depreciation until the liability is settled — a standard deferred-tax and Form 3CD checkpoint.
Are forward contracts covered by this calculator?+
No. Derivatives — forwards, options, swaps — are measured under Ind AS 109 (fair value, with hedge accounting if designated); AS 11 has its own premium/discount amortisation rules for forward contracts not held for trading. This calculator restates the underlying monetary/non-monetary item only.
Does the same logic apply under AS 11 for non-Ind AS companies?+
The monetary/non-monetary split and closing-rate restatement are the same in substance. The main differences: AS 11 has the para 46/46A legacy deferral option, its own forward-contract accounting, and uses the integral/non-integral foreign operation classification instead of Ind AS 21’s functional currency approach.

Authoritative sources

ICAI
Ind AS 21 — The Effects of Changes in Foreign Exchange Rates — Paras 23 (rates), 28-33 (recognition of exchange differences), Appendix B (advance consideration). Notified under the Companies (Indian Accounting Standards) Rules 2015.
ICAI
AS 11 — The Effects of Changes in Foreign Exchange Rates — For non-Ind AS companies. Paras 46/46A (long-term FC monetary items) were MCA insertions — verify the notification trail for any balance still being amortised.
CBDT
Section 43A — Income-tax Act, 1961 — Actual-cost adjustment for exchange fluctuation on imported capital assets, on payment basis.
Always confirm against the latest version of the source. Regulations evolve and amendments are common.
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Last reviewed: 2026-07-29 · For informational purposes only — not professional advice.