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Ind AS 21 Accounting for foreign currency transaction
Financial Reporting
Video No 14 I llustration 9 Property Plant equipment is measured at closing rate. It is non monetary item so it needs to be measured at historical cost. Am I correct Video Details ------------- Ind AS - CA Final Ind AS 21 The effect of changes in Foreign Exchange Rates #14. Illustration 9
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CA Suraj Lakhotia Admin
Closing rate.
Respected Sir, I saw your reply. In the notes given page number 5 it is given that non monetary items needs to measured at cost. PPE I am taking it as a non monetary items. So when I solve after reading theory I am making mistake here. PPE I am taking it as non monetary items and applying opening exchange rate. (Historical cost) Kindly let me know where I make mistake
Thread Starter
swaminathan sundaramRespected Sir, I saw your reply. In the notes given page number 5 it is given that non monetary items needs to measured at cost. PPE I am taking it as a non monetary items. So when I solve after reading theory I am making mistake here. PPE I am taking it as non monetary items and applying opening exchange rate. (Historical cost) Kindly let me know where I make mistake
Say you are preparing financials in INR. You imported a PPE for $ 10,000 when exchange rate was Rs. 80/$. Now this PPE will be shown at 80,000 for ever. In this case you are converting a foreign currency balance sheet to INR where closing rate is applied.
CA Suraj Lakhotia Admin
Say you are preparing financials in INR. You imported a PPE for $ 10,000 when exchange rate was Rs. 80/$. Now this PPE will be shown at 80,000 for ever. In this case you are converting a foreign currency balance sheet to INR where closing rate is applied.
Case 1 Infotech Global Ltd has a functional currency of USD. In this problem functional currency of Infotech is converted into function currency of Infotech Inc so closing rate is applied. Case 2 Assuming that Infotech Global imported machinery from UK (assumed) for GPB 1000 when exchange rate on the date of purchase is 40 per unit then we will take 40 as conversion rate If closing rate is given we will not consider. Am I correct
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