Exam 8: Translation of Financial Statements Into a Presentation Currency

Where profits generated by the foreign operation are retained in the foreign entity and used for its expansion:

The currency of the country in which the foreign operation is based is referred to as the:

If a reporting entity establishes a foreign operation, the equity used to form the foreign operation is the:

Gairdner Limited has the following items in its statement of profit or loss and other comprehensive income for the year ended 30 June 20X4: Revenue FC120 000, Cost of goods sold FC50 000, Other expenses FC16 000, Income tax expense FC20 000. All items were earned and incurred evenly across the year. The following exchange rates applied: End of reporting period FC1 = $1.45 Average rate for year FC1 = $1.40 The net profit after tax translated into the presentation currency is:

If foreign currency denominated non-monetary assets are measured using the fair value method, they must be translated into the functional currency using the:

Assets and liabilities to be received or paid in a fixed or determinable number of units of money are referred to as:

Translating from the functional currency to the presentation currency involves which of the following procedures?

When translating from the functional currency into the presentation currency, exchange differences arise because of which of the following?

The method used to translate financial statements prepared in the functional currency into the presentation currency is known as the:

Aussie Ltd acquired 100% of Sing Sing Ltd (Sing Sing) on 1 July 20X0. The balance sheet of Sing Sing as at 30 June 20X1 was as follows. Balance Sheet as at 30 June 20X1 $\begin{array}{c}\begin{array}{lll}\\ \text {Machinery- carrying value}\\ \text {Investment property}\\ \text { Receivables }\\ \text {Cash}\\\\\\ \end{array}\begin{array}{r}\underline{S \$} \\ 300000 \\400000 \\500000 \\600000 \\\underline{\quad\quad}\\ \underline{1800000} \\ \end{array}\begin{array}{l}\\ \text { Share capital}\\ \text { General Reserve}\\ \text { Retained earnings}\\ \text { Accounts payable}\\ \text { Income tax payable}\\\\\end{array}\begin{array}{r}\underline{S \$} \\400000 \\200000 \\1000000 \\170000 \\\underline{30000} \\\underline{1800000} \end{array}\end{array}$ -Relevant exchange rates are as follows. 1. July 20X0 1.00 1.15 30 June 20X1 1.00 = 1.25 Average 20X0-X1 1.00 = 1.22 If the local currency of Sing Sing is Singapore dollars and the functional currency is Australian dollars, the total assets of S$1 800,000 would translate into Australian dollars as: