New accounting rules, called AS-11, require companies to record changes in foreign currency loans in their profit and loss accounts. This caused big mark-to-market losses for firms borrowing in foreign currency. Companies mainly serving India, like Tata Steel, Tata Motors, and Tata Chemicals, will take big forex hits. Tata Steel may face a loss of Rs 344 crore, Tata Motors Rs 311 crore, and Tata Chemicals Rs 187 crore. Other firms like Ranbaxy, JSW Steel, and Firstsource Solutions also show losses between Rs 100 crore to Rs 400 crore. These losses are accounting entries only and do not affect cash flow, but markets view them negatively. The Indian rupee fell over 9% in the quarter ending September 2008. When the rupee drops, the value of foreign currency debt goes up in rupee terms. AS-11 demands this increase appear in quarterly profits, lowering reported corporate earnings. Domestic-focused companies gain no benefit from a weak rupee. Small companies are hurt more, with some like Firstsource Solutions possibly posting net losses. Tata Steel's net profit margin might drop by about 1 percentage point. Overall, companies may lose 10-50% of their operating profits due to forex losses. Major companies like Reliance Communication, Reliance Industries, and Bharti Airtel follow different accounting rules and avoid this impact. If they followed AS-11, their profits would dip by Rs 800-900 crore. The rupee’s fall is turning foreign debt accounting into a profit killer for many Indian firms.