5. Foreign Currency

Question 1

Foreign Currency: Monetary items definition

Answer 1

Easily converted into cash

E.g. Receivables
Payables
Loans

Question 2

Foreign Currency: Non-monetary items definitin

Answer 2

No right to receive/deliver cash

E.g. Inventory
PPE

Question 3

Foreign Currency: Where in accounts: Exchange differences: Relating to trading transactins

Answer 3

Operating income
(/expenses)

Question 4

Foreign Currency: Treatment of exchange differences: Non-trading transactions

Answer 4

Interest income/finance costs

Question 5

Foreign Currency: Subsequent treatment of non-monetary items held on cost model

Answer 5

None

Question 6

Foreign Currency: Subsequent treatment of non-monetary items held at fair value model

Answer 6

Retanslated at spot rate on date fair value determined

Question 7

Foreign Currency: Subsequent treatment of non-monetary items held at fair value model: Fair value of item recognized directly in equity:
Treatment of any related exchange differences

E.g. revalued property

Answer 7

Also recognised directly in equity

Question 8

Foreign Currency: Subsequent treatment of non-monetary items held at fair value model: Fair value of item recognized in P&L:
Treatment of any related exchange differences

E.g. revalued property

Answer 8

Also recognised in P&L