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  1. Closing Rate Method
    Which rates to use for what balances?
    • Assets and Liabilities: Closing Rate
    • Equity: Actual Rate
    • Profit & Expenses: Equity so use actual/average rate
  2. Closing rate method
    What are the extra consolidation entries?
    1. FCTR on goodwill. fair valued adjusted assets and Deferred tax

    • 2. Allocation of FCTR to NCI
    • Includes:
    • share of FCTR on book value to NCI
    • share of FCTR on goodwill to NCI
    • share of FCTR on deferred tax and fair valued adjusted assets
  3. Closing Rate Method
    How do you check the translation gain/ reconcile FCTR balance?
    • Start with Beginning Net assets
    • Track Movement in net assets throughout year

    Translate Ending net assets at CR

    • Difference = Change in FCTR
    • + FCTR beginning balance
    • = Ending FCTR balance
  4. Temporal Method
    What rate do you use at initial recognition?
    FC Transaction X SPOT RATE
  5. Temporal Method
    Before B/S date

    What rate to settle monetary items? (Ex: A/P)
    Spot Rate
  6. Temporal Method
    Before B/S date

    Extinguishment of non-monetary items at what rate? (Ex: Depreciation, COS)
    Historical Rate
  7. Temporal Method
    B/S date

    What rates to use for:
    FC Monetary Item?
    Non-monetary Item @ Hist. Cost?
    Non-monetary Item @ FV?
    • FC Monetary Item: CR
    • Non-monetary Item @ Hist. Cost: HR
    • Non-monetary Item @ FV: Rate at date FV was determined
  8. Temporal Method
    Where do exchange gains and losses go to?
    P&L except for FRS 21:32
Card Set:
2014-06-04 00:48:58
All forex related
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