PAS 21

Question 1

On December 1, 20x1, Entity A sells goods to Entity B, on credit, for the total sale price of $1,000. Entity B settles the account on January 6, 20x2. Entity A’s functional currency is the Philippine peso (₱). The relevant exchange rates are as
follows:

dec. 1, 20x1 - P50:$1
dec. 31, 20x1 - P52:$1
jan 6, 20x2 - P47:$1

Required: How much is the foreign exchange gain (loss) to be recognized by Entity A on December 31, 20x1?

Answer 1

2,000

Question 2

On December 1, 20x1, Entity A sells goods to Entity B, on credit, for the total sale price of $1,000. Entity B settles the account on January 6, 20x2. Entity A’s functional currency is the Philippine peso (₱). The relevant exchange rates are as
follows:

dec. 1, 20x1 - P50:$1
dec. 31, 20x1 - P52:$1
jan 6, 20x2 - P47:$1

Required: How much is the foreign exchange gain (loss) to be recognized by Entity A on January 6, 20x2?

Answer 2

(5,000)