x
Info
x
Warning
x
Danger
 / 
 / 
 / 
  16. When translating into the presentation currency the translation difference

Question :   16. When translating into the presentation currency the translation difference : 2102194

 

16. When translating into the presentation currency the translation difference is recognised:

a. in profit or loss

b. as a separate component of equity

c. in retained earnings

d. as an asset or liability, depending on whether it is a debit or credit balance.

17. Aussie Ltd has an investment in Yankee Inc.  The shares in Yankee were acquired on 15 August 20X4.  Yankee uses the revaluation model to account for land & buildings.  A building which was acquired by Yankee on 1 April 20X2 was revalued on 15 March 20X9.  The exchange rate used to translate the building into the presentation currency at 30 June 20X9 is the rate that applied on:

a. 1 April 20X2

b. 15 August 20X4

c. 15 March 20X9

d. 30 June 20X9

18. Mortimer Limited has the following items in its statement of profit or loss and other comprehensive income:

Revenue FC60 000,

Cost of goods sold FC25 000,

Interest expense FC8 000,

Income tax expense FC10 000.

All items arose evenly across the year.  The following exchange rates applied:

End of reporting period  FC1 = $0.80

Average rate for year  FC1 = $0.75

The net profit after tax translated into the presentation currency is:

a. $12 750;

b. $13 600;

c. $21 250;

d. $26 667.

19. Under AASB 121 The Effects of Changes in Foreign Exchange Rates, an entity must disclose which of the following items in particular?

I. The amount of exchange differences included in profit or loss of the period.

II. The amount of the exchange difference included directly in share capital during the period.

III. Whether a change in the functional currency has occurred.

IV. The reason for using a presentation currency that is different from the functional currency.

a. I, II, III and IV;

b. II and III only;

c. I, III and IV only;

d. I and IV only.

 

 

Solution
5 (1 Ratings )

Solved
Accounting 1 Year Ago 139 Views
This Question has Been Answered!

Related Answers
Unlimited Access Free
Explore More than 2 Million+
  • Textbook Solutions
  • Flashcards
  • Homework Answers
  • Documents
Signup for Instant Access!
Ask an Expert
Our Experts can answer your tough homework and study questions
150417 Accounting Questions Answered!
Post a Question