Closing rate, for AS 11 purposes, is:
AThe forward rate
BThe historical rate on the date of original transaction
CThe annual average rate
DThe exchange rate at the balance sheet date
Answer & Solution
Correct answer: D. The exchange rate at the balance sheet date
1. Step 1: Per AS 11, closing rate = exchange rate at the reporting (balance sheet) date.
2. Step 2: Used for translating monetary items.
3. Step 3: Hence (A).
_Source: ICAI BoS CA Inter Paper 1, Ch 15 "Accounting for Branches including Foreign Branches"_