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CA Final Ind AS 21 The Effects of Changes in Foreign Exchange Rates — practice questions — page 3

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 61–63 of 63.

Does a normal administrative delay make a currency not exchangeable?Read the answer and worked solution →In assessing exchangeability, which is considered?Read the answer and worked solution →A lends to foreign subsidiary B, no settlement planned. The loan is part of:Read the answer and worked solution →

Worked practice questions

Does a normal administrative delay make a currency not exchangeable?

  1. Yes, any delay does
  2. No, it does not
  3. Yes, beyond one day
  4. Yes, over a holiday
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Correct answer: B. No, it does not

Ordinary administrative delays do not prevent a currency from being exchangeable.

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In assessing exchangeability, which is considered?

  1. The entity's intention
  2. Intention and ability
  3. Its ability, not intention
  4. Only the fair value
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Correct answer: C. Its ability, not intention

The test is whether the entity is able to obtain the currency, even if it decides not to do so.

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A lends to foreign subsidiary B, no settlement planned. The loan is part of:

  1. Group trade debtors
  2. Net investment in B
  3. B's share capital
  4. A's stock of goods
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Correct answer: B. Net investment in B

Any group subsidiary can hold the item, and it is part of the net investment in B if settlement is neither planned nor likely.

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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