ACCY308 Exam NZIAS 21/AASB 121 / IAS 21

ACCY308 Exam NZIAS 21/AASB 121 / IAS 21 Why are financial statements translated from one currency to another? - Paragraph 3 of NZIAS 21/AASB 121 / IAS 21 It's to provide more relevant information to the users of the financial statements. Paragraph 3 of NZIAS21 / AASB 121 / IAS 21 - Translation of results and financial position of foreign operations for the purpose of including those results in the consolidated financial statements of a group, or to allow an investor to equity account for these results. Translation of an entity's results and financial position into another currency presentation purposes. What is Functional Currency - Paragraph 8 of NZIAS 21 / AASB 121 / IAS 21 - "The currency of the primary economic environment in which the entity operates." Revenue - Functional Currency - At the rates current at the dates the transactions occurred. If transactions occur evenly across the time period, average rate may be used. Monetary Expenses - Functional Currency - At the rates current at the dates the transactions occurred. If transactions occur evenly across the time period, average rate may be used. Non-Monetary Expenses - Functional Currency - At the rates used to translate the other related assets. Dividends Paid - Functional Currency - At the rate current at the date of payment. Dividends Declared - Functional Currency - At the rate current at the date of declaration. Monetary Assets - Functional Currency - At the closing rate. Non-Monetary Assets - Functional Currency - At the rate current at the date at which they are recorded. Monetary Liabilities - Functional Currency - At the closing rate. Non-Monetary Liabilities - Functional Currency - At the rate when measured. Share Capital -Functional Currency - At the rate at acquisition/investment Pre-Acquisition Other Reserves - Functional Currency - At the rate at acquisition Post-Acquisition Other Reserves - Functional Currency - At the rate current at originally recognized. Pre-Acquisition Retained Earnings - Functional Currency - At the rate at the acquisition date. Post-Acquisition Retained Earnings - Functional Currency - Carried forward from previous statements. Foreign Exchange Gains/Losses - Functional Currency - Exchange differences are calculated by examining movements in the monetary items over the period. Presentation Currency - Paragraph 8 of NIZAS 21 / AASB 121 / IAS 21 states that presentation currency is the currency in which the financial statements are presented. Revenue and Expenses - Presentation Currency - At the rates current to the transaction date. If they occur evenly throughout the period, use the current date. Dividends Paid/Declared - Presentation Currency - At the rate current to when paid/declared.