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CA Final Ind AS 21 The Effects of Changes in Foreign Exchange Rates — practice questions

Explore 63 free Ind AS 21 The Effects of Changes in Foreign Exchange Rates questions in CA Final Financialreporting. Open each question or exercise to read its content, reference answers and available explanation.

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Ind AS 21 The Effects of Changes in Foreign Exchange Rates questions and exercises with answers

Showing questions 1–30 of 63.

In Ind AS 21, which item is a foreign currency?Read the answer and worked solution →What does closing rate mean in Ind AS 21?Read the answer and worked solution →A spot exchange rate in Ind AS 21 is the rate for which delivery?Read the answer and worked solution →Presentation currency is the currency in which what is shown?Read the answer and worked solution →A monetary item is a right to receive what amount of currency?Read the answer and worked solution →Which of these is a monetary item under Ind AS 21?Read the answer and worked solution →Net investment in a foreign operation is the entity's interest in what?Read the answer and worked solution →Which entity qualifies as a foreign operation under Ind AS 21?Read the answer and worked solution →On initial recognition, which rate records a foreign currency transaction?Read the answer and worked solution →What is the date of a transaction under Ind AS 21?Read the answer and worked solution →When is using an average monthly rate inappropriate?Read the answer and worked solution →At period end, foreign currency monetary items use which rate?Read the answer and worked solution →Historical cost non-monetary items in foreign currency use which rate?Read the answer and worked solution →Exchange differences on settling monetary items are usually recognised where?Read the answer and worked solution →Goods bought for USD 10,000 at Rs 80 remain unpaid; year-end rate is Rs 83. Effect?Read the answer and worked solution →A USD 5,000 receivable booked at Rs 82 stands at Rs 80 at year end. Effect?Read the answer and worked solution →Stock imported for USD 2,000 at Rs 75 is held at cost; year-end rate is Rs 80. Carrying amount?Read the answer and worked solution →A purchase is settled in a later period. How is the difference split?Read the answer and worked solution →A non-monetary gain goes to OCI. Where does its exchange component go?Read the answer and worked solution →Revalued PPE in foreign currency: where does its exchange difference go?Read the answer and worked solution →Net investment item: consolidated exchange differences first go where?Read the answer and worked solution →Net investment item: parent's separate statements show differences where?Read the answer and worked solution →A loan to a foreign subsidiary is net investment when repayment is what?Read the answer and worked solution →Which balances cannot be part of a net investment in a foreign operation?Read the answer and worked solution →Books kept in a non-functional currency translate as if items were:Read the answer and worked solution →How is a change in an entity's functional currency applied?Read the answer and worked solution →When may a functional currency, once determined, be changed?Read the answer and worked solution →After a functional currency change, translated non-monetary items become?Read the answer and worked solution →Which cost factor is a primary functional currency indicator?Read the answer and worked solution →Which is only supporting evidence of functional currency?Read the answer and worked solution →

Worked practice questions

In Ind AS 21, which item is a foreign currency?

  1. Any currency used by its customers
  2. Currency other than the functional currency
  3. Currency other than the Indian rupee
  4. Any currency outside the G20 group
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Correct answer: B. Currency other than the functional currency

The test is relative to the entity's own functional currency, so for a company whose functional currency is the dollar, the rupee is a foreign currency.

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What does closing rate mean in Ind AS 21?

  1. Average rate over the whole year
  2. Rate on the date the books are audited
  3. Spot rate at end of reporting period
  4. Rate agreed in a forward contract
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Correct answer: C. Spot rate at end of reporting period

Closing rate is the spot rate prevailing on the reporting date, used mainly for monetary items.

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A spot exchange rate in Ind AS 21 is the rate for which delivery?

  1. Delivery after three months
  2. Delivery on a fixed future date
  3. Delivery at next reporting date
  4. Immediate delivery on the day
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Correct answer: D. Immediate delivery on the day

Spot means the rate applicable to an exchange completed immediately, as opposed to forward rates for later delivery.

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More Financialreporting topics

Ind AS 116 LeasesInd AS 36 Impairment of Assets and Ind AS 38 Intangible AssetsInd AS 24 Related Party Disclosures and Ind AS 108 Operating SegmentsInd AS 1 Presentation of Financial StatementsInd AS 12 Income TaxesInd AS 113 Fair Value MeasurementInd AS 109 Financial InstrumentsInd AS 23 Borrowing Costs and Ind AS 40 Investment Property