Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › functional currency
- This topic has 4 replies, 2 voices, and was last updated 5 years ago by aarina.
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- July 13, 2018 at 12:31 pm #462065
Hi may i know for asset purchase overseas,
what is the rule for the exchange rate?
Is it only using spot rate? For what instances should we use forward rate/closing rate/average rate of exchange? (if ever there was such a question) non monetary we should not retranslate and monetary we should retranslate to functional currency?July 15, 2018 at 8:43 am #462319Hi,
When we enter into a transaction, it is initially recorded at the rate in place on the day of the transaction.
At the reporting date the monetary items are translated a the closing rate, and gains/losses taken through profit and loss. Non-monetary items are not translated.
It will not get more complex than than this at this level.
Thanks
July 15, 2018 at 3:39 pm #462492Hi,
Thank you for that. Please enlight me more on the next level complexity… as im planning to finish my acca this year entirely.
July 16, 2018 at 12:27 pm #463142Hi,
Sorry but I’m here to help you through FR and going any further with complexities will not help you in the slightest.
I’d recommend that you work the examples/questions on functional currency in the study text and revision kit and you won’t go too far wrong.
Thanks
July 28, 2018 at 10:49 am #465004ok thanks
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