Chapter 30 – The effects of changes in foreign exchange rates

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May 17, 2018 at 3:34 pm #452462
malavika146
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Dear Mike,
This is with reference to F7 study notes Example 1 in Chapter 30 – The effects of changes in foreign exchange rates.
I was able to follow the entries passed for the transactions in ZMW and GBP. However was unable to understand the reason the exchange difference was not recorded for GBP and only for ZMW as of 31Dec15 as the rate was different at year end. Does the term “contracted rate of exchange” has to do anything with this?
Request you to kindly clarify.
Regards,
May 17, 2018 at 6:23 pm #452544
MikeLittle
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Yes it certainly does! As the course notes clearly say, where a contracted rate of exchange applies, then that is the rate that is applied throughout the life of that transaction
OK?
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