Pas 29 Flashcards
What is the core principle under PAS 29?
Restatement procedures for financial statements in hyperinflationary economies.
What does PAS 29 prescribe?
Restatement procedures for the financial statements of an entity whose functional currency is the currency of a hyperinflationary economy.
What happens when inflation is very high?
A) Financial statements become misleading and must be restated.
B) The value of money increases over time.
C) Monetary items retain their purchasing power.
D) Hindi makakauwi si Tatay Digs sa Pinas
Financial statements become misleading and must be restated.
What is the definition of inflation?
A) A general increase in prices and decrease in the purchasing power of money.
B) A sudden rise in the value of money and a decrease in prices.
C) A situation where only the prices of luxury goods increase.
D) A decline in the overall price level over time.
A
Does PAS 29 prescribe an absolute rate for hyperinflation?
a. yes
b. no
c. maybe
d. regine velasquez
B
What is one indicator of hyperinflation according to PAS 29?
A) The population prefers to keep wealth in non-monetary assets or stable foreign currency.
B) The central bank fixes the exchange rate for an extended period.
C) The government enforces strict price controls to limit inflation.
D) The demand for local currency increases significantly over time.
A
Fill in the blank: Inflation is normally ignored due to the _______.
A) going concern assumption
B) stable monetary unit assumption
C) historical cost principle
D) accrual basis of accounting
B
True or False: Financial statements in hyperinflationary economies do not need to be restated.
False.
What must be done to financial statements in hyperinflationary economies?
They must be restated.
Where should the financial statements of an entity that reports in?
hyperinflationary economy
currency of a hyperinflationary economy are restated in terms of?
measuring unit at the end of the reporting period
Comparative figures are also restated into the same?
a. measuring unit current
b. measuring current unit
c. current measuring unit
d. current unit measuring
C
• When translating the current-year financial statements, only ______ items and income and expenses are restated.
a. nonmonetary
b. monetary
c. only me
A
nonmonetary items and income and expenses are restated using the formula of
a. historical cost x (current price index / historical price index)
b. historical price x (current cost / current price)
c. current price x (historical cost / historical price)
d. current cost x (historical price index / current price index)
A
Where is the gain or loss on the net monetary position resulting from the restatements recognized?
A) Other comprehensive income
B) Profit or loss
C) Ogie Alcasid
D) Statement of financial position
B
