• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

IAS 21- Recognition of exchange difference

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IAS 21- Recognition of exchange difference

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by Stephen Widberg.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • January 15, 2022 at 4:53 am #646081
    Raphael97
    Participant
    • Topics: 2
    • Replies: 3
    • ☆

    Scenario:

    Jay has purchased a PPE on 1 June 20×5 for 28million euro, with an estimated useful life of 5 years. At 31 May 20×6, the PPE had a fair value of 24million euro. The company uses revaluation model as per IAS 16 in the accounting for PPE.

    Exchange rate on:

    1 June 20×5 euro to pounds = 1.4
    31 May 20×6 euro to pounds = 1.3

    Dear Sir, may i know how should I treat this particular transaction in the financial statement of Jay as of 31 May 20×6?

    Also please do advise me on the following workings:

    On initial recognition $m $m
    Dr.PPE 20.00
    Cr. Bank 20.00

    At the year ended $m Rate Euro’m
    Balance b/d 20.00 1.4 28.00
    Depreciation (4.00) 1.4 (5.60)
    Historical carrying amount 16.00 22.40

    Revalued Amount (31 May 20×6) 18.46 1.3 24.00
    Increase in value (18.46-16) 2.46

    Breakdown of the increase in value:

    Due to rise in fair value (24-22.4)/1.4 1.14
    Due to foreign exchange movement (24/1.3)-(24/1.4) 1.32
    Total amount to be credited into OCI 2.46
    (included within revaluation reserves, no need
    separate out)

    January 15, 2022 at 1:01 pm #646111
    Stephen Widberg
    Keymaster
    • Topics: 12
    • Replies: 2843
    • ☆☆☆☆☆

    Purchase – exchange rate at transaction date

    SFP date – if revalued, use exchange rate at date of valuation

    XD to OCI (assuming revaluation is upwards)

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • baraka42 on PM Chapter 13 Questions Standard Costing and Basic Variance Analysis
  • baraka42 on PM Chapter 13 Questions Standard Costing and Basic Variance Analysis

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy