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Hi Mike,
As per lec note, pg 156:
monetary items should be reported using the closing rate.
Does this mean closing rate at transaction date end, or yr end?When monetary items are settled
• any exchange difference that arises when monetary items are settled is reported in the statement of profit or loss in the periodTransactions such as payment of debts, trade payable, receipt of payment for trade receivables etc are regarded as monetary items right? or am I pursuing the wrong meaning of the word “monetary items”?
And these are all translated at the rate that obtains on the date of payment.
So when settling a debt for $100 and that translated and was recorded at 105 Euros and now you’re paying that $100 debt but you have to pay 119 Euros to settle that $100 debt, the extra 4 Euros will be a foreign exchange loss and is charged to the statement of profit or loss
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