Week 7 Flashcards
What is the functional currency?
The primary currency in which the entity operates
What is the presentation currency?
Currency in which the financial statements are presented to shareholders, Often in the currency where the majority of shareholders reside
What is a monetary item?
Includes right to receive (or obligation to deliver)
Fixed and determinable number of units of currency
What is a non-monetary item?
Does not include a right to receive (or obligation to deliver)
What are examples of monetary items?
Provisions (Cash), Cash Dividends, Pensions, and other Employe cash benefits
What are examples of Non-monetary items?
Prepayments, Goodwill, PPE, Provisions settled with non-monetary
What is a spot rate?
The rate at the date of transaction
Can use an average
What is the condition of using an average spot rate?
There must be no significant fluctuations
What is the interest rate for a monetary A/L?
Closing rate
What is the interest rate for non-monetary items recorded at historical cost?
Spot rate, when A/L recorded
What is the interest rate for non-monetary items recorded at fair value?
The rate at the date of Acquisition
What is the interest rate for the contribution margin at acquisition?
Rate when acquired
What is the interest rate of reserves at accusations?
Rate when acquired
What is the interest rate of reserves at post-acquisition?
the rate at date revalued
What is the interest rate for RE at acquisition?
Rate as when acquired
