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Foreign exchange impact to Statement of Cash flows

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Foreign exchange impact to Statement of Cash flows

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • August 9, 2016 at 2:53 am #332129
    Binh
    Member
    • Topics: 41
    • Replies: 78
    • ☆☆

    Dear Mr Tutor,

    In the period we have 200$ loss in foreign exchange, 150$ due to conversion in foreign payment, receipt…50$ due to translation foreign monetary ending balance using closing rate. Then, we add back all 200$ to profit before tax in Operating Cash Flows section or we just add back 50$? 150$ are cash-expenses, arising from transactions like:
    D Cash
    D Exchange loss
    C Account Payable

    Moreover, we imported a machine with historical value 1000$ but at the maturity, we have paid to the supplier 1030$ due to rising in exchange rate. Then, we include in Investment Cash Flows – Acquisition of assets: 1000$ or 1030$?

    Thank you in advance!

    August 13, 2016 at 9:16 pm #333015
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7187
    • ☆☆☆☆☆

    Hi,

    All exchange gains/losses are non-cash items and must be adjusted accordingly through operating activities.

    The acquisition of the PPE would be the actual cash payment made.

    Thanks

  • Author
    Posts
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