Exam 36: Translation of the Accounts of Foreign Operations

Rudd Ltd,an Australian entity purchased Lee Ltd and Kew Ltd on 1 July 2012.Both entities are considered foreign operations of Rudd Ltd based in Singapore.The following information was extracted from the foreign operation's accounts for the period ended 30 June 2015: Exchange rate information is: The translation from Singapore dollars to Australian dollars resulted to the following balances: Which of the following translation processes were applied to Lee Ltd and Kew Ltd,respectively,for the year ended 30 June 2015?

Lennon Ltd has two foreign operations based in Japan.The following information was extracted from the foreign operation's accounts for the period ended 30 June 2015: Exchange rate information is: The translation from Japanese Yen to Australian dollars resulted to the following balances (rounded to the nearest ¥000): Which of the following translation processes were applied to Yoko Ltd and Ono Ltd,respectively,for the year ended 30 June 2015?

Aus Co Ltd has a foreign operation based in Japan.The following information was extracted from the foreign operation's accounts for the period ended 30 June 2005: Exchange rate information is: What is the amount at which each item would be translated (rounded to the nearest $A)?

Exchange differences resulting from the translation of foreign operations to presentation currency are shown:

The net assets of a foreign operation at 30 June 2005 are constituted as assets of US$400,000 and liabilities of US$250,000.The parent entity purchased the foreign subsidiary on 1 July 2002.Exchange rate information is as follows: The foreign operation has not traded during the year ended 30 June 2005,so the net assets remained unchanged during the period.What is the parent entity's foreign currency exposure for the year ended 30 June 2005?

In translating the accounts of a foreign operation from functional to presentation currency,resulting exchange differences is recognised in other comprehensive income.

Under the translation method required by AASB 121,the approach to translating a foreign operation's accounts includes:

The exchange rate used for the translation of the payment of dividends is the spot rate at the date when the retained earnings or reserves,from which the dividends were drawn,were createD.

In the process of consolidating the translated financial accounts of a foreign operation,the calculation of minority interests will be affected by the translation process in what way?

The translation approach required by AASB 121 in translating to presentation currency is similar to the "current rate" method required under the former AASB 1012:

The amount of a foreign operation's post-acquisition retained earnings as translated into Australian dollars will depend on the amount translated from the income statement:

AASB 121 requires foreign currency transactions to be recorded on initial recognition in the functional currency,by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the reporting date.

If the assets of a foreign operation exceed its liabilities,and the value of the Australian dollar falls relative to the currency of the foreign operations,there will be:

As prescribed in AASB 121,translation of the accounts of foreign operations to the presentation currency requires any gains or losses on translation be taken directly to reserves:

Under the former AASB 1012 there were two methods of translation of the accounts of foreign operations; the method being used being dependent upon the whether these operations are integrated or self-sustaining:

If the exchange rate for US dollars relative to Australian dollars goes from US$1 = $A2.10 to US$1 = $A2.20,the Australian dollar has strengthened.

'Exchange rate' is:

Aus Co Ltd has a foreign operation based in New Zealand.The following information was extracted from the foreign operation's accounts for the period ended 30 June 2005: Exchange rate information is: What is the amount at which each item will be translated (rounded to the nearest $A)?

As prescribed in AASB 121,in translating the accounts of a foreign operation from local currency to functional currency,the exchange rate to use for land is the exchange rate at the date of the transaction.

The foreign exchange exposure of the parent entity in relation to its foreign operation relates to the net cash flows of the investment in the operation: