Under working 2 in the answers it is only the assets and liabilities translated at the closing rate of 5. I'm a bit confused as I thought that the whole of the statement of financial position was translated at the closing rate? Is there any other past exam questions involving foreign currency as this is the only one I have come across so far. Thanks, Gaz.
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SBRJune 11 Question 1 (foreign currency translation)
I'm not sure of that exact question but I was under the impression that assets and liabilities are translated at the closing rate, equity is translated at the historic rate (ie date acquired), with the exception of post-acquisition reserves. Post acq reserves is the balancing figure, and subsequently includes the cumulative exchange gains and losses.
Hope this helps.
Hope this helps.
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