Temporal Rate Method Flashcards
Non current assets rate
Given rate or revaluation rate
Inventory rate
Closing inventory rate
Trade receivables and cash rate
Statement date
Share capital rate
Acquisition date
Bonds, trade payables, interco payable
Statement date
Most income statement rates and revenue
Average rate
Steps
- Translate sofp
- Translate statement of changes in equity
- Translate income statement
- Consolidate sofp
- Consolidate Income statement
- Consolidate changes in equity
Translating sofp- watch out for…
Include any revaluation reserve
Retained earnings figure is the balancing figure
Translating changes in equity
Retained earnings b/f- usually given in q
Profit- balancing figure
Dividends- translate at rate given
Retained earnings cfwd=balancing retained earnings from sofp
Translating income statement
Total- profit after tax= profit from changes in equity (bal figure)
Add fx reserve= Balancing figure
Consolidating sofp
Add goodwill= calculate in euros (investment/acquisition rate)- share(acquisition retained profits+share capital) and then translate back- divide acquisition date
Add revaluation reserve- H+share in S’s translated revaluation)
Add retained earnings b/f= share of S bf q’s, less share of s acquisition less impairment in past year
Add retained earnings for year= (H- dividends) + share in s (profit for the year- dividends) less impairment in current year
Add non controlling interest share of net assets (share capital+retained earnings cfwd+revaluation reserve)
Consolidating income statement
Add goodwill impaired for current year translated
Carry over fx reserve
Split into non controlling interest (non controlling interest share X S’s profits) and rest is for the group
Consolidated statement of changes in equity
Retained earnings bfwd- copy from sofp- already calculated
Profit attributable to Apple group= from income statement
Less Dividends for H only
Retained earnings cfwd- total
