Ias 21- Forex

Question 1

Accounting policy: foreign exchange

Answer 1

Foreign exchange differences are recognised in the profit or loss section of the statement of profit or loss and other comprehensive income as incurred

Question 2

Profit before tax

Answer 2

Profit before tax is calculated after taking the following into account:

Expenses. R
Foreign exchange difference XXX

Question 3

Creditors

Answer 3

Inventories/ppe to the value of FCxxx were purchased during the year. This transaction was not hedged against negative foreign currency fluctuations. The foreign creditor of RXXX at year end will ve settled on date.

Applicable. exchange rates
Transaction date: FC = XXX
Year end date: FC =xxx

Question 4

Foreign currency

Question 5

Functional currency

Answer 5

is the currency of the primary economic environment in which the entity operates

Question 6

Exchange rate

Answer 6

is the ratio of exchange for two currencies.

Question 6

Spot exchange rate

Answer 6

is the exchange rate for immediate delivery.

Question 7

Monetary items

Answer 7

are units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency.

Question 7

Closing rate

Answer 7

is the spot exchange rate at the end of the reporting period.