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In the context of International Accounting Standard (IAS) 21, The Effects of Changes in Foreign Exchange Rates: i) Define monetary items. ii) Explain how foreign currency monetary...

In the context of International Accounting Standard (IAS) 21, The Effects of Changes in Foreign Exchange Rates:
i) Define monetary items.
ii) Explain how foreign currency monetary and non-monetary items are translated at the
end of each reporting period.

Answers

Wilfred
(i) Monetary items
Monetary items are units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency.
(ii) Foreign currency monetary items are translated using the closing rate
- Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of transaction.
- Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined
Wilfykil answered the question on February 11, 2019 at 10:22

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